Tax Performance in Bangladesh: A Study in the Context of Post Vat Era.

Abstract

As a developing country, Bangladesh has one of the world’s lowest tax to GDP ratios since long (by their account it has stood 10.5 percent in the most recent year 2015-16), which is one of the lowest among its neighboring countries and similar economies. Although the country has been suffering from an average budget deficit of 4.22 percent of GDP for the most recent five years, around 84% of its government revenue comes from tax. National Board of Revenue (NBR), as the apex body collects almost 96% of the tax revenue where the contribution of direct and indirect tax is around 38% and 62% respectively. Since its inception in 1991, VAT has been dominating in the total tax structure contributing around 35% of the total tax revenue followed by income tax (33%). This paper aims at analyzing the tax performance of Bangladesh in the context of Post VAT era.