Finance Division sees structural weaknesses
15 June 2026, 00:00 AM
15 June 2026, 11:41 AM
Star Business Report
HighlightsRevenue growth structurally lags behind nominal GDP expansionBangladesh’s revenue-to-GDP ratio stands at 7.9 percentMassive compliance gap as 62 percent taxpayers fail to file returnsBangladesh’s revenue collection has grown more slowly than the economy over the past decade, indicating substantial untapped revenue potential, according to a recent analysis by the Finance Division.The analysis showed that the country’s average revenue buoyancy -- a measure of how quickly government revenue grows relative to the economy -- stood at 0.93 between fiscal years 2014-15 and 2024-25.A revenue buoyancy coefficient above 1 indicates that tax collection is outpacing economic growth, reflecting a highly efficient revenue system. Conversely, a coefficient below 1 suggests revenue growth is trailing economic expansion, often because of structural inefficiencies or a narrow tax base.In its latest Medium-term Macroeconomic Policy Statement (MTMPS) for FY2026-27 to FY2028-29, published last week, the Finance Division said revenue buoyancy had been highly volatile, peaking at 2.10 in FY21 before plunging to 0.15 in FY22. The coefficient fell again to 0.60 in FY25.“On average it stood at 0.93, indicating revenue growth has structurally lagged behind nominal GDP expansion,” the MTMPS said.
