Bangladesh lost an estimated BDT 2.26 trillion in tax revenue due to widespread tax evasion in 2023. Half of the tax evasion came from the corporate sector alone, amounting to around BDT 1.13 trillion. Not just in 2023, the trend has been growing since 2011. For instance, in 2012, the country lost BDT 965 billion, and in 2015, it was over BDT 1.33 trillion in uncollected taxes. According to estimates, the total size of tax evasion in Bangladesh could range anywhere from BDT 418 billion to as much as BDT 2,230 billion. These findings were revealed in a recent study by the Center for Policy Dialogue (CPD), an independent research organization.

The data came up during a briefing held today (April 21) at CPD’s office, where the focus was on “Corporate Income Tax Reform for Graduating Bangladesh.” Tamim Ahmed, a senior research associate at CPD, presented the key findings.

In his presentation, Tamim Ahmed pointed out, “By November next year, Bangladesh is set to graduate from LDC status. To make that transition smooth, we must improve revenue collection. But it’s not just about collecting more—we also need to ensure the system is fair.”

He explained that CPD’s research involved surveys and focus group discussions with stakeholders from the National Board of Revenue (NBR) and other LDC-related entities.

CPD’s findings show that high tax rates, weak administration, complex legal structures, and widespread corruption are among the main reasons for tax evasion.

Researcher Tamim Ahmed also mentioned that only 9 percent of the country’s businesses actually pay taxes—and these are mostly large firms. There is no clear data on whether the remaining 91 percent are paying any tax at all.

As a way forward, he recommended gradually lowering the corporate tax rate to a minimum of 15 percent and using that as a way to expand the tax net and increase revenue.

CPD’s Research Director, Dr. Khondaker Golam Moazzem, emphasized the importance of fairness in the tax system and urged the government to take the issue seriously. “There’s no alternative to increasing domestic revenue if we want to keep moving forward as a country,” he said. He noted that currently, 20 percent of the country’s tax revenue comes from the corporate sector, while 40 percent comes from value-added tax (VAT).

He also called for reforms that would make tax collection more equitable and efficient. This includes eliminating unnecessary incentives, digitizing the tax system, and reducing the hassle for businesses and individuals when paying taxes.

The joint study by CPD and Christian Aid recommends putting more focus on the corporate sector to increase overall revenue. Among those present at the briefing were Christian Aid Country Director Nuzhat Zabin, and researchers Mohammad Zahid Hossain, Tasnim Noor Pinky, and Ikhtekharul Islam.