Puzzling low tax-GDP ratio

[BananaRepublicUK]

Puzzling low tax-GDP ratio

While official data portrays the burgeoning growth of Bangladesh’s economy, tax collection relative to the gross domestic product (GDP), a measure of the size of the economy, shows an almost opposite trend.

www.thedailystar.net

These talking heads should read economic history of countries like USA.

They will see US collected negligible tax until the First World War and then the new deal.

They think 2300 dollars per capita - barely enough to buy three meals - should yield 1/6 in taxation lol

Which planet are they living on?!!!

Florida, massively rich state, has no income tax.

These purveyors of big government think the government should build everything!

They think the government should have a monopoly on social provision!

Bangladesh has large NGOs playing a big part.

Bangladeshis are generous and pay the zakat diligently - another avenue of social provision.

I don’t want Bangladesh to become a socialist paradise! Like West Bengal lol

We should have multiple actors in social provision and infrastructure investment.

I think a very good measure of Bangladesh’s middle class is how many cows are sacrificed at Eid. Average cow costs 60k taka I believe.


@bluesky
@UKBengali
@Homo Sapiens
@Bilal9

 

[bluesky]

"In 2020, government revenue in Nepal amounted to approximately 21.8 percent of the nation's gross domestic product (GDP)". 2021/11/09

Above is the tax-GDP ratio of Nepal while BD is probably now less than 8%. So, the govt has borrowed $128 billion worth of Taka by selling bonds and borrowing from the local banks.

The tax-GDP ratio must be more than 18% to survive without borrowing money from the banks. So, how the govt will repay the money without printing Taka that will create a huge inflation?

 

[BananaRepublicUK]

"In 2020, government revenue in Nepal amounted to approximately 21.8 percent of the nation's gross domestic product (GDP)". 2021/11/09

Above is the tax-GDP ratio of Nepal while BD is probably now less than 8%. So, the govt has borrowed $128 billion worth of Taka by selling bonds and borrowing from the local banks.

The tax-GDP ratio must be more than 18% to survive without borrowing money from the banks. So, how the govt will repay the money without printing Taka that will create a huge inflation?

Nepal is a socialist country run by ex communists.

Muslims are not socialists let alone communists.

They will not tolerate high taxes and big government.

The solution to excessive borrowing is not high taxes.

It is to cut the borrowing!

Every taka the government borrows is a taka the banks cannot lend to the private sector.

My fellow Sylheti, Saifur Rahman, weaned Bangladesh out of the socialist hell.

Successive Sylheti finance ministers have steered Bangladesh towards a small government and private investment state.

Where NGOs have flourished.

Another Sylheti created the largest NGO in the world.

I am proud of that.

Let’s not go back to the hellish early 70s!!! With Mujib’s socialist paradise!

My parents left Bangladesh to escape Mujib’s socialist paradise.

 

[mb444]

Nepal is a socialist country run by ex communists.

Muslims are not socialists let alone communists.

They will not tolerate high taxes and big government.

The solution to excessive borrowing is not high taxes.

It is too cut the borrowing!

Every taka the government borrows is a taka the banks cannot lend to the private sector.

My fellow Sylheti, Saifur Rahman, weaned Bangladesh out of the socialist hell.

Successive Sylheti finance ministers have steered Bangladesh towards a small government and private investment state.

Where NGOs have flourished.

Another Sylheti created the largest NGO in the world.

I am proud of that.

Let’s not go back to the hellish early 70s!!! With Mujib’s socialist paradise!

My parents left Bangladesh to escape Mujib’s socialist paradise.

Dont know if you are serious or trolling....but i like it...really funny.

 

[Bengal71]

Looks like we got out very own Tai Hai Chen.

 

[EasyNow]

Personally I think an escalation in tax revenue right now would be a mistake.

Current income tax rates are 0% for earnings up to 3 lakhs. So the vast majority of earners fall under this threshold. We are a low cost manufacturing economy, taxing the labour is counter productive.

Increasingly taxing the rich is also a short sighted policy for a growth focused economy. The rich are pretty much the only ones paying taxes - how much can we squeeze them until it backfires? BD is open for business and we shouldn't stifle growth at this stage.

Corporation tax, is another elusive one, it is easy and legal for companies to minimise profits- when done right it ensures money is reinvested into the business and keeps money circulating in the economy. So again enforcing this strictly is difficult and can become counter productive.

VAT is an area I think can be improved upon but with a cost of living crisis across the world, now is not an ideal time for pushing this.

As a cheap manufacturing economy, low labour costs, low operating costs are our USP - we'd be foolish to lose this edge for short term money grabbing via taxes. Low revenue collection now, is in fact, an investment in our future economy.

 

[li0nheart]

My parents left Bangladesh to escape Mujib’s socialist paradise.

Looks like you have been regretting your parents' decision to move out of Bangladesh. It's okay buddy. If you want you can apply for a Bangladesh citizenship.
We all know UK is not a place to be if you consider future trends. Bangladesh has so much more growth potential. If you have become accustomed to lazy and stagnant lifestyle, it's ok to stay there. In that case, you should stop commenting on policy decisions taken after extensive consideration by more knowledgeable persons who are in constant touch with the rhythm of the Bangla economy, just to make yourself feel better about your life.

 

[Bengal71]

Personally I think an escalation in tax revenue right now would be a mistake.

Current income tax rates are 0% for earnings up to 3 lakhs. So the vast majority of earners fall under this threshold. We are a low cost manufacturing economy, taxing the labour is counter productive.

Increasingly taxing the rich is also a short sighted policy for a growth focused economy. The rich are pretty much the only ones paying taxes - how much can we squeeze them until it backfires? BD is open for business and we shouldn't stifle growth at this stage.

Corporation tax, is another elusive one, it is easy and legal for companies to minimise profits- when done right it ensures money is reinvested into the business and keeps money circulating in the economy. So again enforcing this strictly is difficult and can become counter productive.

VAT is an area I think can be improved upon but with a cost of living crisis across the world, now is not an ideal time for pushing this.

As a cheap manufacturing economy, low labour costs, low operating costs are our USP - we'd be foolish to lose this edge for short term money grabbing via taxes. Low revenue collection now, is in fact, an investment in our future economy.

I think it got more to do with people paying the correct amount of tax they are liable for and people who are eligible for income tax paying the tax to start woth. We have many doctors who earn 2/3 lakhs per month, they don't pay the due tax or don't pay at all. Likewise we have lawyers and other professionals who make 1/2 lakhs per month, we have thousands of shop owners and other businessmen who earn 1/2 lakh per month.

 

[UKBengali]

BD needs to slowly increase tax revenue by on average 1% of GDP each year till around 2050.

It needs to now raise more revenue than before in order to provide the necesary public services like education, health and a basic social welfare "safety net".

Getting from 8% to 30% of tax revenue to GDP ratio would be a nice place for a semi-developed BD to be in by 2050.

After 30% then raising more money from taxes is probably not a good idea for BD society and culture.

 

[bluesky]

Nepal is a socialist country run by ex communists.

Muslims are not socialists let alone communists.

They will not tolerate high taxes and big government.

The solution to excessive borrowing is not high taxes.

It is to cut the borrowing!

Every taka the government borrows is a taka the banks cannot lend to the private sector.

My fellow Sylheti, Saifur Rahman, weaned Bangladesh out of the socialist hell.

Successive Sylheti finance ministers have steered Bangladesh towards a small government and private investment state.

Where NGOs have flourished.

Another Sylheti created the largest NGO in the world.

I am proud of that.

Let’s not go back to the hellish early 70s!!! With Mujib’s socialist paradise!

My parents left Bangladesh to escape Mujib’s socialist paradise.

Again, you are making a very unusual lame excuse. Socialist countries rather do not tax people and companies but the capitalist countries do.

It is just the opposite.

 

[BananaRepublicUK]

Again, you are making a very unusual lame excuse. Socialist countries rather do not tax people and companies but the capitalist countries do.

It is just the opposite.

70s U.K. was a socialist country with marginal tax rates of 90%!!!

 

[BananaRepublicUK]

BD needs to slowly increase tax revenue by on average 1% of GDP each year till around 2050.

It needs to now raise more revenue than before in order to provide the necesary public services like education, health and a basic social welfare "safety net".

Getting from 8% to 30% of tax revenue to GDP ratio would be a nice place for a semi-developed BD to be in by 2050.

After 30% then raising more money from taxes is probably not a good idea for BD society and culture.

You want the government to take a whopping 30% in taxes?

Wow!

I think it should peak at 15%.

To fund a modest armed forces and very basic social provision.

Education should be left to NGOs and private sector.

Private sector schools must take 20% of students on full scholarship basis.

We have brilliant NGOs. Let them do the heavy lifting by leaving them alone.

BRAC is absolutely brilliant. Better than any state run organisation.

More infrastructure should be built on a build and own basis.

With government focussing on local roads and local bridges.

We want to be the low tax zone of South Asia.

Don’t want to ape high tax India and Pakistan with their mega defence spending and subsidies for uncompetitive businesses.

 

[EasyNow]

I think it got more to do with people paying the correct amount of tax they are liable for and people who are eligible for income tax paying the tax to start woth. We have many doctors who earn 2/3 lakhs per month, they don't pay the due tax or don't pay at all. Likewise we have lawyers and other professionals who make 1/2 lakhs per month, we have thousands of shop owners and other businessmen who earn 1/2 lakh per month.

I agree tax dodgers should be clamped down on, but I really don't think there's as much out there as people imagine.

I think 97% of people earn under 6 lakh per year, the vast majority under 3 lakh. The 3% of doctors and elite do exist - but the ones I know are paying tax. Most of the guys earning 3 lakh per month are either taxed at source - so paying full tax - or have structured their earnings as a company, so they use legitimate tax avoidance tactics, no law breaking.

We can close tax loopholes to stop tax minimisation, but that will have a knock on affect on the whole corporate world - which is dangerous.

Rather I think our best solution is to get more people into the 3lakh plus bracket - and it's heading that way slowly.

 

[Bengal71]

I agree tax dodgers should be clamped down on, but I really don't think there's as much out there as people imagine.

I think 97% of people earn under 6 lakh per year, the vast majority under 3 lakh. The 3% of doctors and elite do exist - but the ones I know are paying tax. Most of the guys earning 3 lakh per month are either taxed at source - so paying full tax - or have structured their earnings as a company, so they use legitimate tax avoidance tactics, no law breaking.

We can close tax loopholes to stop tax minimisation, but that will have a knock on affect on the whole corporate world - which is dangerous.

Rather I think our best solution is to get more people into the 3lakh plus bracket - and it's heading that way slowly.

Those doctors and lawyers may be in small numbers but look at shops. There are many tens of thousands of shops in shopping centers all over BD, thousands of wholesalers and dealers and many other service providers who do not pay tax or pay a lump sum significantly lower than their dues. These are tens of thousands who earn at least 1 lakh a month. I don't advocate making the life of poor and Middle class miserable by applying tax. Poor should be spared of tax and middle class should be taxes at a low rate that won't affect them. If a middle class earner makes 6 lakhs a year, 20k annual tax won't impact him severely but it will be a lot of money for the government revenue.

 

[Beny Karachun]

Puzzling low tax-GDP ratio

While official data portrays the burgeoning growth of Bangladesh’s economy, tax collection relative to the gross domestic product (GDP), a measure of the size of the economy, shows an almost opposite trend.

www.thedailystar.net

These talking heads should read economic history of countries like USA.

They will see US collected negligible tax until the First World War and then the new deal.

They think 2300 dollars per capita - barely enough to buy three meals - should yield 1/6 in taxation lol

Which planet are they living on?!!!

Florida, massively rich state, has no income tax.

These purveyors of big government think the government should build everything!

They think the government should have a monopoly on social provision!

Bangladesh has large NGOs playing a big part.

Bangladeshis are generous and pay the zakat diligently - another avenue of social provision.

I don’t want Bangladesh to become a socialist paradise! Like West Bengal lol

We should have multiple actors in social provision and infrastructure investment.

I think a very good measure of Bangladesh’s middle class is how many cows are sacrificed at Eid. Average cow costs 60k taka I believe.


@bluesky
@UKBengali
@Homo Sapiens
@Bilal9

Taxes, big government, regulations, they're all hurting the economy.