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Tax evasions galore

Published : Wednesday, 30 April, 2025 at 12:00 AM  Count : 353
Md Zillur Rahaman
In Bangladesh, the tendency to not pay taxes properly has become a common issue. Many people buy goods and services through tax evasion, which causes various problems in the economy of the country. There is widespread discussion about what is being damaged in the economy of Bangladesh due to tax evasion and what the remedy is, but there is no effective remedy. In fact, tax evasion is a kind of gentle crime. Socially well-established persons, corporate firms or well-established companies do some criminal acts in the process of their professional work, called a gentle crime. Such as income tax evasion, VAT fraud, less payment of import duty, excise duty not properly paid etc. The impact of this gentle crime is deadly in the society.

According to a recent research report by the Center for Policy Dialogue (CPD), the government lost the revenue of Tk 2,26,236 crore in 2023 (fiscal year 2022-23) due to tax evasion in Bangladesh and the amount of tax evasion was Tk. 96,503 crore in 2012, i.e. the amount of tax evasion in the country has more than doubled in the last 11 years. According to the CPD Research, 'Corporate Income Tax Reform and Tax Justice Perspective', a huge amount of taxes are being levied on the one hand, and on the other hand, many institutions are facing problems with paying taxes. About 45 percent of the company participating in the study said that tax officials sought kickback while paying corporate taxes. In addition, 82 percent of companies have claimed that existing tax rates are unfair.

Studies have shown that tax evasion has been increasing at an alarming rate in the country since the 2011. In 2012, the amount of tax evasion was Tk 96,503 crore, which increased to Tk 1,33,673 crore in 2015. The CPD says the main reason behind the tax evasion is high taxation, poor surveillance, complicated laws and mass corruption in the tax system. The report says, "From the point of view of taxes, extensive tax evasion discourages honest taxpayers and increase the tax burden on citizens loyal to the law."

Tax evasion is a major hurdle in all countries of the world. Due to strict laws, proper enforcement and awareness in developed countries, tax evasion can be prevented enough. But tax evasion is a major concern in our country. There is a tendency to avoid in both direct and indirect taxes. The National Board of Revenue (NBR) is set a target every year. Otherwise, their activities are not dynamic. Economists say the VAT collection in the case of indirect tax due to tax evasion is not deposited in the government's treasury. Again, there is no surveillance of the government in these places, the kind of surveillance that the company or individual is supposed to be in the case of direct tax, especially to increase taxes, increase digitalization, simplify.

A total of 120 companies have taken information on the CPD Corporate's income tax research- listed and non-listed in the stock market in Dhaka and Chittagong. Besides, the comments of the business leaders of the five sectors-the garments, plastic, information technology, banking and leather-were taken by the business leaders of these five sectors and the survey was conducted in December in the last year. According to the CPD, the tax evasion of Tk 2,26,236 crore has been evident in 2023 and the corporate tax evasion is half or 50 percent. As a result, the corporate tax has been evacuated at Tk 1,13,118 crore in 2023.

Among the loss of the government due to tax evasion is significant- first, tax is the main source of income for the government. When people refrain from paying taxes, the revenue of the government decreases. As a result, it is not possible to make adequate investment in the government in education, health, infrastructure development etc. Secondly, the money required for government development projects is to pay the revenue from taxes mainly. The implementation of these projects is disrupted by tax evasion, which has a negative impact on the overall development of the country. Thirdly, Traders who do not pay taxes get unscrupulous competition compared to tax payers. As a result, honest traders suffer in the market and are forced to close the business many times. Fourth, the tendency for tax evasion is more commonly seen among the rich and influential people of the society. As a result, the poor and the general public are facing more disadvantages. The opportunity to provide and rebuild social services through the tax system is lost. Fifth, the economic good governance and transparency of a country play an important role in gaining the confidence of international investors. The high rate of tax evasion has a negative impact on the country's international image, which hinders foreign investment.

On the other hand, all the measures need to be taken to prevent tax evasion-first, a massive campaign should be launched to increase public awareness on the harmful effects of tax evasion. People can be encouraged to pay taxes through media, social media and educational institutions. Second, the tax payment process needs to be made easy and transparent. People can be encouraged to pay taxes by increasing the benefits of paying online and providing necessary information and assistance. Third, tax audit and disciplinary action must be strengthened. Strict legal action should be taken against those who are tax evasion so that others take education from it. Fourth, the people have to convince the people that they are getting government services and benefits directly by paying taxes. Development in health, education, security, etc., people will be interested in paying tax spontaneously. Fifth, incentives and benefits can be provided for those who pay regular taxes. For example, discounts, prizes or honors can be paid for tax payments.

CPD research says the situation is a major challenge for Bangladesh in the process of passing from the LDC list. The investment of multinational companies is expected to increase after the LDC passage, which will increase the risk of tax evasion and tax avoidance. In order to address this challenge, the CPD has recommended the development of the tax system and the development of the tax system and the policy reform. The research company also says the government is losing huge amounts of revenue every year due to incentive and tax discounts in addition to tax evasion. Taxes are being discounted on various sector -based taxation for investment. They should be completely closed. Incentives or tax concessions may not be the basis for investment.

In fact, the major obstacle to meeting the NBR goals is the manpower crisis and dishonest manpower. The institutional and technical capabilities of the NBR should also be increased. In essence, manpower, technological capacity, transfer pricing cell- these need to be strengthened. Another major problem with the NBR is automation. We have been hearing about automation for many years. At various times, numerous projects, including automation, income tax automation, customs automation, came and went. But we did not get a full automation service that could not be prevented from tax evasion.

Overall, the tendency for tax evasion is doing serious harm to the economy of Bangladesh. This requires awareness and responsible behavior of the general public as well as the general public. It is the responsibility of all of us to play an active role in the development and prosperity of the country by paying taxes.

The writer is a banker


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