Bangladesh Collects Only Half as Much Corporate Tax as Peer Economies, OECD Report Finds

Dhaka, July 26, 2026 — Although corporate tax contributes around one-quarter of Bangladesh's total tax revenue, the government collects relatively little from companies compared with the size of the economy. 📊 Corporate income tax revenue stands at around 1.5-1.8 percent of GDP, approximately half the level of many peer economies, according to the latest report by the Organisation for Economic Co-operation and Development (OECD). ⚠

🌏 Bangladesh also trails several small economies in Latin America and the Caribbean, the report showed. The poor collection leaves the government with less money to fund public services and increases its reliance on VAT, customs duties, and borrowing. 💰

📊 Tax Exemptions: A Massive Drain

⚠ Companies in the power, readymade garments, export processing zones, and electronics sectors received Tk 73,989 crore in corporate tax exemptions in fiscal year 2022-23. 💰 Tax exemptions and reduced rates together amounted to 69 percent of the total direct tax collected that year.

• 💰 Tk 73,989 crore in exemptions for power, RMG, EPZ, and electronics sectors (FY 2022-23)
• 📊 Exemptions = 69% of total direct tax collected that year
• 📈 CPD study estimates Bangladesh lost about Tk 1.13 lakh crore in corporate tax revenue in FY23
• 📈 Revenue loss equivalent to 17% of the national budget

👥 Why Companies Pay Less Tax

🏛 Business leaders and economists blame the weak collection on multiple factors:

• 👥 Large informal economy — nearly two-thirds of businesses operate outside the tax net
• 📋 Weak compliance — only 42,000 of 1.60 lakh TIN-holding companies submitted returns in FY26
• 🔍 Underreporting — incomplete financial statements aided by weak auditing
• 🤝 Collusion — between auditors and tax officials in some cases
• 📊 Tax evasion rising — from Tk 96,503 crore in 2012 to Tk 1.13 lakh crore in FY23

👥 Khondaker Golam Moazzem (Research Director, CPD): "Incomplete or inaccurate financial statements, aided by weak auditing and, in some cases, collusion between auditors and tax officials, mean firms often pay less tax than their actual financial capacity warrants."

👥 Rupali Haque Chowdhury (President, FICCI): "A company may not make a profit in a particular year, and that is understandable. But if a company has been operating for 10 or 20 years without ever paying corporate tax, it points to a serious compliance issue."

📊 Tax Structure Overview

• 🏭 Non-listed companies: 27.5% corporate tax rate (one of highest in region)
• 🏭 Listed companies: 22.5% under five-year corporate tax roadmap
• 🏭 Banks, insurance, financial institutions: 37.5%
• 📊 Corporate tax accounts for ~25% of total tax revenue (vs 19.5% Asia-Pacific average)

📈 IMF Pressure and Reform Needs

🌏 The OECD findings come at a time when Bangladesh is under growing pressure to strengthen domestic revenue collection. With one of the world's lowest tax-to-GDP ratios, the National Board of Revenue (NBR) has repeatedly missed annual targets, while the IMF reform programme calls for stronger domestic resource mobilization. 🏛

👥 Sabbir Ahmed (President, ICAB): "The bigger concern is the minimum tax, which raises the effective tax burden even when companies earn little or no profit." He called for faster digitalization of tax administration and greater automation to reduce contact between taxpayers and officials. 💻

👥 Apurba Kanti Das (former NBR member): "When so many major sectors enjoy tax exemptions or concessional rates, it is only natural that corporate income tax collection remains relatively low compared with many other countries." ⚠