Govt rules out tax hikes, bets on broader base

The government has ruled out any increase in tax rates, opting instead to expand the tax base and curb evasion to raise the tax-to-GDP ratio, said Rashed Al Mahmud Titumir, economic and planning adviser to the prime minister.

The focus remains on boosting investment and improving compliance to enhance collection, he said at a press briefing yesterday at the National Board of Revenue (NBR) headquarters in Dhaka.

“We are not increasing tax rates. Our focus is on expanding the overall economic base so that revenue grows naturally,” Titumir said.

“The government will not increase the burden of domestic or foreign debt as in the past. Instead, we aim to raise the tax-to-GDP ratio without imposing additional pressure on taxpayers already strained by prolonged inflation.”

Three task forces are working day and night to raise revenue without increasing tax rates, he said, adding that the government is aiming to achiev an all-time-high revenue in the fourth quarter of the current fiscal year.

“We have three months remaining in the current fiscal year. Within this period, we are optimistic that in the fourth quarter we will achieve higher revenue targets than at any previous time,” he said.

To that end, he informed that the government is planning to “introduce performance-based incentives for officials and reduce wastage” instead of continuing to grant “group-based tax privileges.”

He noted that rising poverty levels make it imperative to prioritise social protection spending.

Several new and expanded programmes have already been rolled out, including support schemes targeting women, religious service holders, and other vulnerable groups.

Against this backdrop, the government has outlined a three-pronged strategy: keeping the budget deficit under control, reducing reliance on domestic borrowing, and increasing revenue through economic expansion.

Policymakers view investment as the key driver of sustainable growth.

“Increased investment will lead to higher production, which will create jobs. Higher employment will, in turn, raise incomes and government revenue,” Titumir noted.

Stating that the government inherited a “destroyed economy,” he said revenue figures in the past were often manipulated. With the updated iBAS system, real-time data will now be available.

He also described the decision to split the NBR into two entities as logical, adding that discussions would be held to move forward on the matter.

Titumir further said that while fuel and gas prices were increased repeatedly before the interim government, the current administration -- mindful of inflation -- will avoid such measures.