NBR Chairman stresses need to boost Bangladesh’s tax-to-GDP ratio

NBR Chairman says, BD tax-to-GDP ratio is critically low than neighboring countries

Dhaka, Aug 18 - National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan on Sunday underscored the importance of increasing Bangladesh’s tax-to-GDP ratio, which he described as critically low compared to neighbouring countries.

“Our tax-to-GDP ratio is currently just 7.3 percent, whereas it stands at 12 percent in India, 17.5 percent in Nepal, 12.3 percent in Bhutan, and 7.5 percent in Pakistan,” he highlighted during his first meeting with senior NBR officials at his office at Sher-e-Bangla Nagar. “We must prioritize enhancing our tax collection efforts.”

The NBR Chairman pointed out that the government’s budget is largely based on revenue collection targets, which he suggested are often set unrealistically high. “The NBR is given very high targets in the budget, which are not always set with professional considerations,” he noted.

This approach, according to him, has led to the government consistently formulating deficit budgets, which in turn increases national borrowing. “We need to generate sufficient revenue to avoid further increases in national debt,” he emphasized.

The NBR Chairman also pointed out that 67 percent of the government’s revenue currently comes from indirect taxes. “We need to shift our focus toward enhancing direct tax collection, which requires competence and intense hard work,” he said.

He acknowledged that the expansion of the tax net has been limited, with only 5.2 percent of the population registered as taxpayers, compared to 23.08 percent in India.

In a bid to improve the tax administration and support foreign direct investment (FDI), the NBR Chairman announced the formation of three task forces to amend the Customs Law, Tax Law, and VAT Law. “A business-friendly tax administration is crucial for attracting FDI,” he said. “Policy consistency is also vital—frequent changes in tax policies can undermine investor confidence.”

Khan stressed the importance of enhancing taxpayer services through comprehensive automation, which he believes should be both effective and sustainable. He also warned NBR officials to strictly adhere to rules and regulations. “Follow the rules with zero deviation, or face consequences,” he cautioned.

Reflecting on recent national events, he made a poignant remark about his personal philosophy: “I want to make it clear that I have no interest in living like a cockroach; I want to live like a dinosaur.”

The Chairman urged the NBR to meet its revenue targets through diligent work and careful planning. “We must strive to achieve our goals with due diligence and proper planning, backed by intense hard work,” he said.-UNB