Tax gap is 7.5pc of GDP in Bangladesh: UNESCAP

Tax gap in Bangladesh is estimated at 7.5 per cent of the country’s Gross Domestic Product (GDP) – which is one of the highest in Asia and the Pacific Region.

Tax gap is the estimated difference between the potential and actual tax collections in a country.

United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) made the estimation in its annual flagship publication ‘Economic and Social Survey of Asia and the Pacific 2018’ released on Monday last in Bangkok.

“Actual tax collections have fallen short of their potential levels in the Asia-Pacific region,” the report noted.

ESCAP earlier estimated the tax potential in Asia-Pacific economies, based on each country’s economic structure, including such factors as agricultural value added, GDP per capita level, and the degree of trade openness.

“Actual tax collection levels were below their potential levels in 17 Asia-Pacific economies with available data,” it mentioned.

“Such tax gaps are estimated to be more than 6 per cent of GDP in such countries as Afghanistan, Bangladesh, Bhutan and Maldives,” the report added.