Bring 20 million urban population under tax net to spare poor from burden: Economist

Approximately 20 million urban people, representing the top 10 per cent or 13 million households, should be brought under direct income tax as their income accounts for 45 per cent of total urban income, proposed a noted economist, referring to the Household Income and Expenditure Survey (HIES) 2022(HIES 2022), on Saturday. 

“Forty-five per cent of urban income is concentrated among 10 per cent or 13 million urban households where approximately 20 million people could be eligible to pay tax,” said Binayak Sen, director general of the Bangladesh Institute of Development Studies (BIDS) during the public sector think-tank’s first-ever post-budget discussion, titled “National Budget for 2024-2025 and the Medium-Term Outlook on the Bangladesh Economy,” on Saturday.

If these urban high-income earners were brought into the tax net, there would be no need to increase tax rates or extend the tax burden to middle and lower-income groups, he said.

He also stressed the need for reforming the NBR as part of ‘key institutional reforms’ to boost revenue mobilisation and meet the budget expenditure.

Four research directors of BIDS Dr Monzur Hossain, Dr Kazi Iqbal, Dr Mohammad Yunus, and Dr S M Zulfiqar Ali also spoke at the event.

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