Bangladesh Country Profile

Tax Administration

Individual Corruption

According to the Transparency International Bangladesh National Household Survey 2007, approximately one-fifth of the tax payers stated that they paid bribes in connection with tax payments. Two-thirds of these respondents report that they pay bribes in order to avoid harassment. The tax imposed on similar households differs widely because of illicit dealings between households and tax officials.

Business Corruption

Tax procedures are bureaucratic and slow, and while tax laws are complex, the authorities have extensive discretionary power in assessing the levels of taxation. This makes the sector susceptible to corruption. According to Global Integrity 2008, tax laws are not always enforced uniformly and without discrimination. Tax payers are often forced to appeal through the legal system, which is cumbersome and time-consuming.

The Tax Ombudsman reports that corruption in relation to tax officers and tax administration, delays in decision-making and delays in tax refund payments is caused by several factors. Among these are the improper maintenance of taxpayer records, neglect in responding to taxpayer's applications and inquiries, illegal decision-making, reluctance to issue determined tax refunds, subversion and neglect of prescribed procedures, and a deficiency of knowledge and skill.

Political Corruption

In September 2007, Afroza Abbas, wife of the detained former Minister of Housing and Public Works, was sentenced to a total of 16 years in prison and a substantial fine in two tax evasion cases. She was charged with concealing information about wealth on tax returns and for providing false information on the returns.

Frequency

The World Bank & IFC: Doing Business 2009:
- Companies are required to make 21 tax payments and spend 302 hours on average at a total tax rate of 39.5% of profits annually to manage the burden of paying taxes.

Transparency International Bangladesh: National Household Survey 2007 on Corruption in Bangladesh 2008:
- 21% of households that paid tax had to pay bribes, the average size of which was BDT 5,282.

- Of 14% of the respondents paying holding tax, 3% had paid bribes averaging BDT 619.

The World Bank & IFC: Enterprise Surveys 2007:
- 30% of companies surveyed consider tax administration a major constraint.

- 86% of companies expect to give gifts in meetings with tax inspectors.