Assignment on Taxation

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  • Topic: Tax, Indirect tax, Excise
  • Pages : 2 (541 words )
  • Download(s) : 27
  • Published : September 19, 2013
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Inadequate and stagnant revenue yield relative to GDP:
We can see the status of the ratio of tax revenue to GDP of Bangladesh in the following table for last 7years (Source: Bangladesh Economic Review-2010).

Revenue as % of GDP| 2003-04| 2004-05| 2005-06| 2006-07| 2007-08| 2008-2009| 2009-2010| Total Revenue| 10.6| 10.6| 10.8| 10.5| 11.1| 11.2| 11.5| Tax Revenue| 8.5| 8.6| 8.7| 8.3| 8.8| 9.0| 9.3|

Non-tax Revenue| 2.1| 2.0| 2.1| 2.2| 2.3| 2.2| 2.2|

Analysis:
The ratio of tax revenue to GDP is very low comparing to other developing countries.

High-ratio of indirect to direct tax revenue:
Most of the tax revenue is from indirect taxes which are clear from the following table (Source: Bangladesh Economic Review-2010). Revenue (TK. In crore)| 2003-04| 2004-05| 2005-06| 2006-07| 2007-08| 2008-09| 2009-10| Total revenue| 35400| 39200| 44868| 49472| 60539| 69180| 79484| Tax revenue| 28300| 31950| 36175| 39247| 48012| 55526| 63956| Non-tax revenue| 7100| 7250| 8693| 10225| 12527| 13654| 15528| % of tax to revenue| 79.94%| 81.51%| 80.63%| 79.33%| 79.31%| 80.26%| 80.46%| Direct Tax(DT)| 6239| 6988| 8303| 10275| 12502| 15462| 19516| % of DT to total tax| 22.05%| 21.87%| 22.95%| 26.18%| 26.04%| 27.85%| 30.51%| Indirect Tax(IT)| 22061| 24962| 27872| 28972| 35510| 40064| 44440| % of IT to total tax| 77.95%| 78.13%| 77.05%| 73.82%| 37.96%| 72.15%| 69.49%|

Analysis:
An analysis of the revenue from the existing taxes shows that the indirect taxes predominate the revenue yield of the country. More than 70% of the tax revenue are from indirect taxes.

Dominance of VAT and Import duty:
From the following table we can see the dominance of VAT and Import duty (Source: Bangladesh Economic review-2010)

Item wise collection| 2004-05| 2005-06| 2006-07| 2007-08| 2008-09| 2009-10| VAT| 33.2%| 34.3%| 34.9%| 35.4%| 36.2%| 35.6%|...
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