More than 43% of the country’s tax revenue is used to pay for salaries and allowances of public employees, said the Policy Research Institute (PRI) of Bangladesh on Tuesday.

In the last 12 years, the tax revenue has remained largely stable at 34.5%, but government pay and allowances have increased by a whooping 406%, the PRI said in a study unveiled at Amari Dhaka in the capital.

At the same time, pension and gratuities increased 519% to Tk29,100 crore – equivalent to 9% of the total tax revenue, it added.

"We have to think about this vast spending on pay and allowances," said Ahsan H Mansur, executive director of the PRI.

The findings of the study were shared at an event titled "Bangladesh's domestic resource mobilisation – imperatives and a roadmap".