The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) yesterday suggested Bangladesh increases its tax revenue to up to 70 percent from the existing 26 percent.
In its report, Economic and Social Survey of Asia and the Pacific 2014, the UN body also suggested rationalisation of the tax system to create larger tax base, tackling tax evasion and tax fraud, and strengthening of tax administration.
The government is already addressing some of these issues, according to the report.
Shamshad Akhtar, under-secretary general of ESCAP, launched the survey report at the 70th commission meeting at the ESCAP headquarters in Bangkok yesterday. ESCAP has been publishing such survey report since 1947 on its member nations.
Lower tax collection is one of the major causes for lower development in the Asia-Pacific region, she said, adding that higher tax collection could be a good way to develop the Asia-Pacific region, as in many countries the larger business groups evade taxes.
“We need to work to reduce the revenue collection gap. The economy in the Asia-Pacific region has performed well. It is time to go for sustainable development. We will rise moderately.”
The report also said the rising income inequality has deepened in Bangladesh over the last few decades, which is a major challenge for the medium-term.
Gender inequality is also evident, with the labour force participation rates for women and men at 36 percent and 82 percent respectively.
The report said the economy has seen growth at more than 6 percent over the last few years due to expanding garment export and strong household spending fuelled by steady workers' remittance.
In Bangladesh, annual private investment contracted for the first time in at least a decade due to political unrest related to parliamentary elections and the increasing adverse effects on the economy arising from infrastructure and energy shortage.
Political tensions dampened both consumer and investor confidence. Slower export growth and falling workers' remittances are expected to hold back growth, the survey report said.
However, the agricultural sector is likely to perform better due to improved weather conditions.
To contain food inflation, substantial waste of agricultural produce needs to be minimised by improving the supply chain logistics and setting up cold storage and processing facilities, the report said.
The survey report also suggested enhancing agricultural productivity by ensuring that small-holder farmers benefit from modern technologies.