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21 November, 2019 00:00 00 AM
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Bangladesh’s tax-GDP ratio is significantly lower

Says UNCTAD report
STAFF REPORTER, Dhaka
Bangladesh’s tax-GDP ratio is significantly lower
Centre for Policy Dialogue (CPD Executive Director Dr Fahmida Khatun speaks at a media briefing on UNCTAD’s LDCs Report 2019 in the capital yesterday. Debapriya Bhattacharya, a distinguished fellow of CPD, Research Director Dr Khondaker Golam Moazzem, and Senior Research Fellow Towfiqul Islam Khan were also present. PHOTO COURTESY

Bangladesh’s tax-GDP ratio is significantly lower than the LDC average, according to a report prepared by the United Nations Conference on Trade and Development (UNCTAD).

UNCTAD’s report said, LDCs should proactively ensure external finance from all sources is directed to national development priorities. “This approach is the best way to manage their aid dependency and eventually escape it,” the report said.

Revealing the UNCTAD’s report of the Bangladesh chapter at the programme, CPD’s Senior Research Fellow Towfiqul Islam Khan said Bangladesh’s tax-GDP ratio is significantly lower than the LDC average.

Khan suggested increasing tax collection for reducing money laundering, noting that Bangladesh’s exposure to illicit financial flow is very high.

The challenge for developing countries is to finance investment and technological upgrades for structural transformation, while maintaining a sustainable balance of payment outcome.

The country has less dependence on ODA for financing budget and in terms of other economic parameter. In last one decade, ODA to Bangladesh has been less concessional –loan-to-grant ratio increased drastically (third highest among LDCs).

Strengthening the state capacity to drive structural transformation and sustainable development are important to effectively mobilise and manage domestic resources, he said, adding that actions by the international community in support of LDCs will be a must to deliver the SDG commitments.

UNB adds: “The money laundered in 2015 was 36 per cent of our total tax collected during that period, according to the report,” Towfiqul Islam Khan said, noting that tax buoyancy and tax efforts are also very low compared to other LDC countries.

Khan said Bangladesh is among the seven LDCs having relatively lower tax efforts with a score of 0.68, ranking 27th among 29 LDCs.

The senior researcher said resource gap (defined as the difference between domestic savings and gross fixed capital formation) in Bangladesh in 2015-2017 was lower than the LDC average 8 per cent of GDP.

“For nearly half of LDCs, the resource gap remained above 15 per centage points of GDP, which is particularly high for small economics and island LDCs. The gap of Bangladesh was lower than LDC average,” he said.

The report noted that top three recipients accounted for nearly 30 per cent of all additional private finance and the top 10 countries, almost 70 per cent.

“In 2012-2017, among LDCs, the beneficiary country with greatest amount received was Angola at $1.084 billion, followed by Senegal, at $0.895 billion, followed by Myanmar at $0.872 billion, followed by Bangladesh at $0.794 billion,” the report said.

CPD Executive Director Dr Fahmida Khatun and Research Director Dr Khondaker Golam Moazzem also were present there.

Dr Debapriya Bhattacharya, the distinguished fellow of Centre for Policy Dialogue (CPD), said Bangladesh has to play a leading role in international negotiations for sustainable development.

“Bangladesh is expected to graduate from LDC category in 2024. Foreign low-cost financing should be continued for the environment and social sectors,” he said.

He was speaking at a media briefing on the launching of UNCTAD's LDCs Report 2019 titled ‘The present and future of external development finance old dependence, new challenges’ at ERF auditorium in the capital.

Debapriya said Bangladesh never failed to repay foreign loans. The country utilised foreign donations and loans in previous years.

“We’ve to ensure that we’re able to pay back loans in future too,” he added.

Bangladesh is one of the fast growing economies within the LDC group, according to a report prepared by the United Nations Conference on Trade and Development (UNCTAD).

 

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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