Bangladesh lost an estimated Tk 2,26,236 crore or Tk2.26 trillion in revenues to tax evasion in 2023, with nearly half of the amount attributed to corporate tax evasion, according to a new study by the Centre for Policy Dialogue (CPD) unveiled on Monday.
The report, presented by CPD Senior Research Associate Tamim Ahmed, highlights a concerning upward trend in tax evasion since 2011. In 2012, tax evasion was recorded at Tk 965 billion, which rose to Tk 1.34 trillion by 2015.
Speaking at the event, Ahmed noted that corporate tax rates in Bangladesh, similar to global trends, are on the decline. Sectors such as garments and ICT benefit from various tax incentives.
Despite 288,000 companies being registered in the country, only 9%—just 24,381 companies—submitted tax returns in 2023, underscoring a major disparity. “This places an increased burden on the limited number of compliant taxpayers,” he said.
CPD’s Research Director Khondaker Golam Moazzem emphasized that without adequate revenue collection, the government will struggle to provide subsidies, diversify exports, and invest in skills development. Bangladesh primarily depends on three sources for revenue: direct tax, indirect tax, and non-tax income.
Among them, corporate tax contributes nearly 20% while VAT brings in around 40%, meaning these two sources alone account for 60% of total revenue annually.
Moazzem stressed the need for reform in both corporate tax and VAT systems. “Every year during budget season, pressure groups lobby the government to lower tax rates, often diverting policy from its original goals,” he said. “To increase the tax-to-GDP ratio, a comprehensive structural reform is urgently needed.”
He further stated that CPD’s study estimates actual tax evasion in 2023 could be as high as Tk 2.3 trillion, pointing to the challenging environment in which the National Board of Revenue (NBR) operates.
“Beyond tax evasion, many sectors and entities remain entirely outside the tax net. Curbing this large-scale evasion could result in significant revenue recovery,” he noted.
Digitalisation was identified as a key solution. “We’ve seen how vital digital systems can be,” said Moazzem. “For the benefit of both businesses and the NBR, all transactions in Bangladesh need to be brought under a unified digital system to ensure traceability and verification of tax returns.”
However, he added, there remains reluctance from both the NBR and business community to embrace digital transformation.
Christian Aid Bangladesh Country Director Nuzhat Jabin added that most low-income countries, including Bangladesh, heavily rely on direct taxation, a trend that must change.
“As Bangladesh graduates from LDC status, we need to reduce our dependence on direct taxes,” she said.
The CPD report identifies several core factors behind persistent tax evasion in Bangladesh: high tax rates, weak enforcement, complex legal frameworks, and widespread corruption within the tax administration.
From a tax justice perspective, the report notes, high levels of evasion discourage honest taxpayers and unfairly shift the burden onto those who comply with the law.