Tax system made complicated to enable corruption

The country’s tax system has been deliberately made “complex” to create opportunities for corruption, said economist Prof Selim Jahan yesterday, urging simplification of the tax regime.

“Due to the complex tax procedure, taxpayers are more reluctant to pay taxes than they are afraid of taxation,” he said while speaking as the chief guest at a pre-budget shadow parliament held in Dhaka. “This is mostly seen among the affluent.”

“Every budget must have a clear development philosophy and reflect the expectations of ordinary people,” he said, adding that while infrastructure expanded during the Awami League-led government, the absence of qualitative improvements has destabilised the economy.

Jahan noted that the upcoming national budget is being prepared amid mounting economic challenges. In addition to global uncertainties, including tensions in the Middle East, Bangladesh is currently grappling with a rising external debt burden.

About 25 percent of government expenditure now goes towards servicing foreign debt, both interest and principal, he said.

He also pointed to increasing subsidy pressures in the energy, export, and social protection sectors, which are pushing up public spending without a corresponding rise in revenue, resulting in persistent budget deficits.

Jahan also criticised the government’s approach to taxation.

“The government often hesitates to impose taxes on the wealthy, as they are strongly represented within the state structure,” said the economist.

Presiding over the programme, Hasan Ahmed Chowdhury Kiron, chairman of Debate for Democracy, said the current government has inherited a fragile and “disrupted” economy, alleging that many projects undertaken during the previous regime were heavily inflated.

“Nearly 40 percent of project expenditures were fictitious,” he claimed, urging the government to curb such leakages to ensure financial stability.

Kiron called for a people-friendly, business-friendly, and cautious budget that does not exacerbate inflation or increase the burden on low- and middle-income groups.