Bangladesh’s Tax-GDP Ratio to be increased to 15% by 2035
The National Board of Revenue (NBR) has outlined a roadmap to raise Bangladesh’s tax-to-GDP ratio from 6.8 percent to 15 percent by 2035. The plan focuses on expanding the tax base, improving compliance and bringing income tax, VAT and customs administration under a more integrated “One NBR” system.
In a Nutshell
- The NBR has set a target of raising the tax-to-GDP ratio from 6.8 percent to 15 percent by 2035 with an interim target of 8.8 percent in the short term and 10 percent in the medium term.
- The proposed "One NBR" system would integrate income tax, VAT, and customs administration to achieve a wider tax base, stronger compliance, better technology use, and improved data integration rather than relying only on higher tax rates.
- The NBR currently accounts for around 86 percent of the government’s total revenue.
- The tax-to-GDP ratio stood at 6.7 percent in FY2024-25 and 6.8 percent in FY2025-26, after remaining mostly between 7 and 8 percent for the past 25 years.
- The proposed reforms include a unified taxpayer account, third-party data matching, automated compliance monitoring and greater use of digital systems.
- The NBR also plans to review tax benefits and introduce a Revenue Policy Secretariat and a tax-expenditure register.
Context
Bangladesh's tax-to-GDP ratio measures the total tax revenue collected as a percentage of the country's total economic output (GDP). The tax-to-GDP ratio is a primary indicator of a government's ability to finance its operations. If a country's Gross Domestic Product (GDP) represents the total size of its economic pie, this ratio shows the exact slice the government collects in taxes to fund public services, infrastructure, and administration.
Between FY2011-12 and FY2014-15 it reached about 10 percent before dropping to 6.8 percent in FY2025-26. The IMF also notes that a narrow tax base, low compliance, and weak administration cause this.
Thus, the government aims for a 10 percent tax-to-GDP ratio in the medium term and 15 percent by 2035. This NBR roadmap changes how revenue is collected rather than just raising tax rates.
Why It Matters
The gap between 6.8 percent today and 15% by 2035 is huge. Rather than just asking current taxpayers to pay more, the plan increases the tax base which means it brings more people and businesses into the system, especially the ones who remain outside it. To make it fair, it connects information across tax authorities and uses data to stop evasion.
What We Think
Bangladesh has faced a low tax-to-GDP ratio for decades. Now the “One NBR” approach tackles structural flaws like weak compliance and disconnected systems, which makes a much needed measure.