Dhaka, Apr 21 (V7N)- The Center for Policy Dialogue (CPD) has proposed introducing a minimum 15 percent corporate tax rate starting from the next fiscal year, citing alarmingly low compliance and rampant tax evasion in Bangladesh’s corporate sector.

The proposal and research findings were shared during a press briefing held at the CPD office in Dhanmondi, Dhaka, on Monday (April 21). The briefing presented key insights from a research report titled “Corporate Income Tax Reform and Tax Fairness Perspective.”

According to CPD’s data, of the 288,000 registered companies in the country, only 24,381 — just 9 percent — paid corporate taxes in the 2023–24 fiscal year. CPD also revealed that Tk 230,000 crore was evaded in taxes during that period.

Complications and Corruption

The report highlighted serious flaws in tax administration. 45 percent of tax-paying companies reported facing complications in paying taxes, while many alleged that officials from the National Board of Revenue (NBR) had demanded bribes.

Politically Motivated Incentives

Speaking at the event, CPD Research Director Dr. Khandaker Golam Moazzem criticized the current system of sector-specific tax incentives, calling them “politically motivated.” He emphasized the need to move away from such selective incentives to ensure fairness and improve tax collection.

He also said, “In many developing countries, corporate tax rates are significantly higher than in Bangladesh. India, for instance, has 25–30 percent; China 25 percent; Malaysia 24 percent; Indonesia 22 percent; Pakistan 29 percent; and Myanmar 22 percent. In Nigeria, the rate is 30 percent for large industries, and 0 percent for small industries.”

CPD recommends setting a minimum floor of 15 percent to improve compliance and revenue collection, while still allowing room for sector-based flexibility.

Digitalization as a Solution

CPD stressed that digitizing the tax system is the only effective way to curb widespread evasion. The report underlined that the transparency and automation provided by digital systems could significantly reduce corruption and increase trust in the tax regime.

Corporate Tax Trends in Bangladesh

  • Between 2000-01 and 2010-11, corporate tax made up 15 percent of total revenue.

  • In 2014-15, it rose to 25 percent.

  • During the COVID-19 pandemic, the share dropped to 18 percent in 2021-22.

  • It slightly recovered to 20 percent in the 2024-25 fiscal year.

Business Opinion on Reform

According to CPD’s Senior Research Associate Tamim Ahmed, 92 percent of surveyed companies supported the idea of sector-wise corporate tax rates rather than a uniform system.

The CPD believes that meaningful reform — particularly through a minimum tax threshold, digitization, and reduced political influence — could significantly enhance the fairness and efficiency of Bangladesh’s tax system.

END/MSS/AJ