A report citing IMF data says Bangladesh collects government revenue equivalent to just 8 per cent of GDP, among the lowest rates globally….reports Asian Lite News Desk
Bangladesh’s ability to raise government revenue remains among the weakest in the world, with the country collecting revenue equivalent to just 8 per cent of its Gross Domestic Product (GDP) in 2024, according to a report citing International Monetary Fund (IMF) data.
The report, published by Bangladesh’s leading daily The Daily Star, said the country’s revenue-to-GDP ratio is the lowest among Asian economies and significantly below that of many comparable nations, highlighting persistent challenges in tax collection and fiscal management.
At around 8 per cent, Bangladesh’s revenue mobilisation level places it only marginally ahead of conflict affected countries such as Yemen and Sudan. The figure is also well below the internationally recognised benchmark of 15 per cent, which is widely considered necessary for governments to sustain adequate public services, social spending and long term economic stability.
The report noted that neighbouring countries have achieved considerably higher revenue collection rates. Pakistan’s revenue-to-GDP ratio stands at 12 per cent, while Sri Lanka records 13.68 per cent. Bhutan performs substantially better, with revenue equivalent to 26.97 per cent of its GDP.
Economists cited in the report attributed Bangladesh’s weak fiscal performance to several structural issues, including a narrow tax base, the large size of the informal economy, widespread tax exemptions and holidays, weak enforcement mechanisms and heavy dependence on indirect taxation.
The report also pointed to low public confidence in government institutions as a contributing factor. Perceptions of corruption and concerns over the quality of public services have reportedly discouraged voluntary tax compliance among citizens and businesses.
Bangladesh’s low revenue collection has limited the government’s fiscal space for years, constraining public investment in critical sectors such as healthcare, education and social development. The report argued that the country continues to lag behind in human capital development partly because of insufficient spending in these areas.
Experts stressed that broadening the tax base remains the most urgent reform priority. Large segments of the economy, including rural markets and growing peri urban commercial centres, remain outside the formal tax system.
The report also recommended strengthening direct taxation, improving property and land valuation reporting, and expanding digital tax administration systems to reduce tax evasion and improve collection efficiency.
Globally, countries such as Austria, Denmark, Finland and Norway collect more than 50 per cent of GDP in government revenue, demonstrating the fiscal capacity available to advanced economies. However, the report noted that more than 70 developing countries continue to record revenue-to-GDP ratios below the 15 per cent benchmark, reflecting broader challenges faced across the developing world.
The findings highlight the scale of the reforms needed if Bangladesh is to strengthen public finances, expand social spending and sustain long term economic growth.
