Photo: Collected
The government aims to collect total revenue amounting to 11.2 percent of GDP by the end of the 2025-26 fiscal year, according to the Medium-Term Macroeconomic Policy Statement (2023-24 to 2025-26) of the Finance Division under the Finance Ministry.
It said that Bangladesh has consistently maintained an expansionary fiscal stance keeping a moderate budget deficit-usually around 5 percent of GDP-to foster economic growth, reduce poverty, and improve social outcomes.
However, the tax-GDP ratio in Bangladesh is significantly lower than its peers and hence, the government has taken several initiatives to improve revenue collection.
Yet, it said, the fast pace of GDP growth has made it challenging to increase the ratio.
The measures that have been undertaken are expected to gradually improve revenue collection by increasing both the tax volume and the number of taxpayers.
The Statement said that the foremost objectives of the public expenditure policy are to stimulate private investment through building infrastructures and improving the business climate, creating employment opportunities, supporting low-income population through social safety net programs, and reducing poverty through ensuring efficient redistribution of wealth and thus ensuring inclusive development.
Historically, the size of public expenditure has been low relative to GDP in Bangladesh because of various limitations in the process of revenue collection and budget implementation.
To improve the situation, the government has undertaken certain strategies to increase public expenditure.
The target of increasing public expenditure has been set to around 16.2 percent of GDP in FY 2025-26.
Messenger/Sun Yath
