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Toward a Middle-Income Tax Structure: A Development Perspective with a Focus on Bangladesh

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  • Syed Mainul Ahsan
  • Syed M. Ahsan

Abstract

This paper, originally designed to focus on discovering a suitable tax structure that befits an aspiring LMIE as it advances toward the UMIE status. On reflection, it becomes evident that it is hard to meaningfully deliberate on the composition of taxes without focussing in equal measure on the issue of the size of tax revenue at stake, namely the tax effort. The transition to UMIE must embrace public’s demand for a healthcare system fully in compliance with the WHO criteria of UHC, for quality human capital, and for both a physical and IT infrastructure consistent with faster growth over the next decade or so. We explore the probable causes of low revenue effort and an unchanged structure of taxes and their persistence over the recent decades. Finally, we delve into the issues of fundamental reforms of the tax system as well as of the softer aspects of tax reform, namely that of tax administration, evasion and compliance.

Suggested Citation

  • Syed Mainul Ahsan & Syed M. Ahsan, 2024. "Toward a Middle-Income Tax Structure: A Development Perspective with a Focus on Bangladesh," CESifo Working Paper Series 11484, CESifo.
    • Handle: RePEc:ces:ceswps:_11484
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    References listed on IDEAS

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    More about this item

    Keywords

    tax structure; taxable capacity; tax handles; tax compliance; tax evasion; informal economy; inheritance and property taxation;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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