National Task Force Submits Tax System Restructuring Report to Chief Adviser

The National Taskforce on Restructuring the Tax System today submitted its report to Chief Adviser Professor Muhammad Yunus, presenting a set of short- and long-term recommendations aimed at raising Bangladesh’s tax-to-GDP ratio to a sustainable level.

The report proposed comprehensive reforms to the tax system to support overall economic development and to frame tax policies that are conducive to both domestic and foreign trade.

An eleven-member taskforce, led by Policy Research Institute of Bangladesh (PRI) Chairman Dr Zaidi Sattar, formally handed over the report to the Chief Adviser at the State Guest House Jamuna, according to a statement from the Chief Adviser’s Press Wing issued this evening.

Finance Adviser Dr Salehuddin Ahmed, Economic Relations Division (ERD) Secretary Md Shahriar Kader Siddiky, Finance Division Secretary Dr Md Khairuzzaman Mozumder, Financial Institutions Division Secretary Nazma Mobarek, and Internal Resources Division Secretary Md Abdur Rahman Khan were present at the event.

As a developing country, Bangladesh must increase government-owned revenue to accelerate and sustain economic growth, with the tax system playing a central role in this effort. However, the country’s existing tax structure is hampered by numerous weaknesses.

Against this backdrop, the National Taskforce was formed on October 6, 2025, under the leadership of Dr Zaidi Sattar to recommend measures to strengthen revenue mobilisation and raise the tax-to-GDP ratio to an acceptable level. The taskforce was mandated to submit a report outlining specific restructuring proposals and short- and long-term actions by January 31, 2026.

The report described Bangladesh’s tax system as overly complex, inefficient, and heavily reliant on indirect taxes. It stressed that incremental or piecemeal reforms would be insufficient and that deep, structural changes are essential to ensure long-term economic prosperity.

Titled “Tax Policy for Development: A Reform Agenda for Restructuring the Tax System,” the report identified 55 policy issues and offered detailed recommendations for each. It highlighted seven priority policy areas and laid out a roadmap to raise the tax-to-GDP ratio from the current 10 percent to 12 percent by 2030, and from 15 percent to 20 percent by 2035.

The report also proposed rebalancing the tax mix by changing the ratio of direct to indirect taxes from 30:70 to 50:50. Key recommendations included digitalisation and automation, the use of artificial intelligence-based risk analysis, simplification of the tax structure, restructuring of tax incentives, risk-based audits, and a strategic shift away from trade taxes toward domestic taxes.

To modernise the tariff structure, the taskforce suggested ensuring equal effective protection for export-oriented and import-substituting industries. It also recommended replacing valuation at ports with post-clearance audits, noting that a separate valuation database for goods clearance is unnecessary.

In addition, the report called for moving toward a single VAT rate instead of the existing multiple-rate system.

After receiving the report, Chief Adviser Prof Yunus thanked the taskforce members, saying, “The interim government has very limited time. We want to begin the journey of implementing these policies.”

He added that implementation of the recommendations would bring clarity to revenue collection methods and mark a significant policy shift in the country’s economic development and revenue management.

Finance Adviser Dr Salehuddin Ahmed said the report would serve as an important guideline, helping to improve governance in the sector while boosting revenue collection.

Taskforce head Dr Zaidi Sattar noted that revenue collection methods have become excessively complex over the past decade, warning that expanding the revenue base would be difficult without reform. He said swift changes could have far-reaching positive effects on the economy.

Internal Resources Division Secretary Md Abdur Rahman Khan said the report clearly identified existing challenges and outlined practical pathways to address them.