Incentives reshaping tax culture

Historically, Bangladesh has been constrained by a low tax-to-GDP ratio, resulting in the country's higher dependence on international loans for development. Against this backdrop, a recent report by an English daily reveals a remarkable milestone that deserves great appreciation: individual tax return submissions surged by 77 per cent during the July-September quarter for FY2026-27. The submission reached 12.53 lakh, a sharp increase from last year’s 7.09 lakh.
The momentum was caused by a well-timed government incentive: a 5 per cent rebate for early filings. The policymakers had successfully proved that positive reinforcement can radically shift compliance behaviour. While celebrating such a remarkable milestone, policymakers and industry experts should also focus on the structural hurdles that prevent the momentum from scaling across the nation’s 1.3 crore e-TIN holders.
Currently, a major portion of tax collection is driven by tax deducted at source and advance income tax. The rebate is beneficial for those who are ‘tax-payable’, and it offers no financial benefit to people whose taxes were deducted monthly by their employers. Thus, to turn the initial success of a 77 per cent jump into a sustained tax revolution, the policymakers should take strategic steps to mitigate the hurdles.
Expanding the domestic tax base will create a positive domino effect throughout the economy. For decades, infrastructure development has relied heavily on external financing and internal bank loans. Such reliance exposes the national budget to global macroeconomic shocks, stringent repayment conditionalities and currency fluctuations. Additionally, taking loans from internal banks for development creates hurdles for local businesses and entrepreneurs. Hence, a strong self-sustaining tax culture will alter these dynamics and allow our government to fund infrastructure development through internal capital. It will also create more opportunities for local businesses and entrepreneurs to obtain loans from banks.
The milestone of a 77 per cent surge in tax return submission proves that Bangladeshi taxpayers are ready to engage when the right incentives are provided. By systematically removing structural hurdles and continuously modernising the tax framework, our policymakers can transform the current momentum into a permanent self-sustaining engine for national development.