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Impact of Rising Indirect Taxes on Poverty Reduction in Bangladesh: RAPID Study

  • Each one percentage point increase in indirect tax burden leads to a 0.42% rise in poverty
  • Two-thirds of government revenue in Bangladesh comes from indirect taxes like VAT and import duties
  • Indirect tax burden on households below poverty line increased from 2% in 2000 to 7% in 2016
  • RAPID Chairman suggests that lower indirect taxes would lead to faster poverty reduction
  • Income tax is imposed on individuals’ earnings, with those below the poverty line exempt
  • Recommendations include phased tax reform, modernizing tax administration, and boosting direct tax efforts
  • NBR has taken initiatives to increase the number of taxpayers and tax return submissions


Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.


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