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Comilla university
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Role of taxation in economic development of Bangladesh and tax strature of Bangladesh

August 31, 2020
The term 'tax' has been derived from the French word 'taxe' and etymologically, the Latin
word 'taxare' is related to the term 'tax', which means 'to charge'.So Tax is an amount of
money that you have to pay to the government so that it can pay for public services
According to Article 152(1) of the Constitution of Bangladesh, taxation includes the
imposition of any tax, rate, duty or impost, whether general, local or special, and tax shall be
construed accordingly. Taxes are the most important source of revenue of the modern
different economists Say:
""tax' means the income tax payable under the ordinance and includes any additional tax,
excess profit tax, penalty, interest, fees or other charges leviable or payable under this
ordinance" - Section 2(62) of the ITO 1984
taxes are compiulsory payment to government without expectation of direct return in
to the tax payer." - P, E. Taylor.
Bangladesh, as an emerging developing country, is committed to augmenting revenue and
achieving fiscal discipline with a view to increasing self-reliance. The external environment
influencing the tax performance of Bangladesh has changed remarkably as the country
became increasingly integrated with the global economy during the 1990s (McCarten,
2005)an important tool in the following manner:
1 Optimum allocation of available resources: Tax is the most important source of public
revenue. The imposition of tax leads to diversion of resources from the taxed to the non-
taxed sector. This revenue is allocated on various productive sectors in the country with a
view to increasing the overall growth of the country.
2 Top source of government revenue: In Bangladesh tax revenue is the principal source of
Government revenue. The rest of the revenue comes from non-tax sources like fees,
charges, tolls etc. In the Financial Year (FY) 2014-15, total revenue was TK.182954 crore, of
the total the share of tax revenue was TK.155292 crore (84.88%) and non-tax revenue was
TK. 27662 (15.12%)
3 Encouraging savings and investment: Since developing countries like Bangladeshhas a
mixed economy, care has also to be taken to promote capital formation and investment
both in the private and public sectors. Taxation policy is to be directed to raining the ratio of
savings to national income.Introduction of This tax holiday scheme will encourage new
investor to invest more and it will ensure economic development through industrialization

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