Govt raises VAT to make tax-GDP ratio healthy: CA's press secretary

The government is trying to take the country's tax-GDP ratio to a healthy state by imposing a simplified 15% VAT (value-added tax) in a bid to ensure the country's economic growth, Chief Adviser's Press Secretary Shafiqul Alam has said.

He said this at a press briefing at the Foreign Service Academy in Dhaka this (12 January) evening.

Alam said the tax-GDP ratio in Bangladesh has been going down since 2021.

It has reached such a level this year that there is a revenue shortfall of about Tk42,000 crore in the last five months, he added.

"We had a revenue collection target of Tk1,69,000 crore [during the last five months] but we have collected over Tk1,26,000 crore," he said.

Mentioning that Bangladesh's tax-GDP ratio is one of the lowest in the world, Alam said the tax-GDP ratio must reach a better position for the growth of Bangladesh and the well-being of its people.

In this context, VAT on some items have been raised, he said, adding that there were different rates of VAT and the government is trying to bring those to a simplified 15% rate to cut the tax leakage.

After resuming power, the government is trying to cut public expenditure, the press secretary said, depicting the widespread misuse of public money during the ousted regime.

He said the deposed government misused public money in all sectors while the Karnaphuli Tunnel was built in Chattogram and a seven-star hotel was constructed, spending Taka 450 crore public money, on the other side of the tunnel so that former minister Saifuzzaman Chowdhury could take rest there.

He said if the tax-GDP ratio dwindles, it may become impossible to repay the debt Bangladesh has. 

Considering this, the government has decided to increase taxes, Alam said, adding that the money will be spent on the welfare of the country's people.

Replying to a question, the press secretary said the impacts of new taxes will be minimal on the country's people.

Responding to another query over the government's steps to return the laundered money, he said bringing the laundered money back to the country is the government's top priority.
He said the government is tracing where the money was siphoned off and it continues contacts with all possible countries where money was laundered and it is getting overall cooperation from these countries to this end.

Chief Adviser's Deputy Press Secretaries Apurba Jahangir and Abul Kalam Azad Majumder and Assistant Press Secretary Suchismita Tithi were present.