A staggering 67% of individuals earning Tk 1 crore annually remain outside the tax net, according to Khondaker Golam Moazzem, Research Director of the non-governmental think tank Center for Policy Dialogue (CPD). Speaking at a roundtable discussion titled 'Additional Tax Burden on Consumers: What to Do to Overcome' on Wednesday, Moazzem highlighted this alarming statistic, emphasising that even though two-thirds of high-income earners avoid taxation, their inclusion is crucial for expanding the tax base and increasing the tax-GDP ratio.The event, organised by news portal Jagonews24.com, took place at the MCCI Conference Room in Gulshan of Dhaka. Moazzem criticised the interim government's recent decision to impose higher customs duties and taxes on over a hundred products and services, arguing that it tarnishes the government's reputation. He pointed out that there is already a significant revenue shortfall of Tk 85,000 crore in the last six months compared to the collection target set by the International Monetary Fund (IMF). 

Under pressure from the IMF to boost revenue, the government has resorted to increasing indirect taxes rather than expanding the tax net.

He questioned whether the government had explored alternative methods to enhance revenue collections. "It has been claimed that raising customs duties and taxes on numerous goods and services will generate an additional Tk 11,000 to 11,500 crore, but this falls far short of addressing the substantial deficit," Moazzem remarked.

Moazzem also drew attention to the long-standing inefficiencies in Bangladesh's tax administration. Despite efforts spanning 20 to 25 years to automate and modernise the system, progress has been minimal. "Our misfortune lies in the apparent lack of interest within the tax administration toward meaningful reform," he lamented. "Personal interests may be influencing decisions, perpetuating inconsistencies and hindering compliance."

To effectively tackle the revenue gap, Moazzem stressed the importance of enforcing rules and eliminating discrepancies in the tax system. "If we cannot streamline processes or adhere to regulations, tax collection will remain stagnant," he warned.

Instead of burdening consumers with indirect taxes, Moazzem advocated for bringing high-income earners into the tax fold. By broadening the tax base, the government could reduce reliance on regressive tax measures and ensure fairer revenue distribution. His comments underscore the urgent need for reforms in tax administration to address both fiscal challenges and social inequality.

The roundtable featured prominent economists and industry leaders, including Dr Mustafa K Mujeri, former Director General of BIDS, economist Dr MM Akash, Khandaker Golam Moazzem, Research Director at the CPD, Dr M Masrur Riaz, Chairman of Policy Exchange Bangladesh, Ahsan Khan Chowdhury, Chairman and CEO of PRAN-RFL Group, Rezaul Hasan, former member of the NBR, Mohammad Hatem, President of the BKMEA, Ashraf Ahmed, former President of the DCCI, SM Nazer Hossain, Vice President of the CAB, Saif Uddin Nasir, Managing Director of SMC Enterprise Limited, Faria Yasmin, Chief Business Officer of ACI Foods, Mohiuddin Rubel and Rajib Chowdhury, former Directors of the BGMEA, Shafiqur Rahman Bhuiyan, President of the Bangladesh Auto Biscuit and Bread Manufacturers Association, Daulat Akhter Mala, President of the Economic Reporters Forum, Md Zakir Hossain, General Secretary of the Supermarket Owners Association, and Saiful Hossain, former banker.  

The discussion was moderated by Jago News Acting Editor KM Ziaul Haque and hosted by Chief Reporter Ibrahim Hussain Ovi.