Tax compliance means registration of a taxpayer in the system, timely filing of tax returns, completion of accurate reporting and payment of taxes on time. It can be voluntary or enforced. There are two dimensions of voluntary compliance: committed compliance and creative compliance. Committed compliance is the willingness to discharge tax obligations by taxpayers without grumbling. On the other hand, creative compliance refers to any act by a taxpayer aimed at reducing taxes by reducing one’s tax liability. With the tax-GDP ratio of 9.3 per cent, Bangladesh’s tax-GDP ratio is much below the average of developing countries (15 per cent). This is mainly because of poor tax compliance rate in both income tax and value-added tax (VAT), which contribute about 85 per cent of the revenue collection of the National Board of Revenue (NBR).
Tax compliance means registration of a taxpayer in the system, timely filing of tax returns, completion of accurate reporting and payment of taxes on time. It can be voluntary or enforced. There are two dimensions of voluntary compliance: committed compliance and creative compliance. Committed compliance is the willingness to discharge tax obligations by taxpayers without grumbling. On the other hand, creative compliance refers to any act by a taxpayer aimed at reducing taxes by reducing one’s tax liability. With the tax-GDP ratio of 9.3 per cent, Bangladesh’s tax-GDP ratio is much below the average of developing countries (15 per cent). This is mainly because of poor tax compliance rate in both income tax and value-added tax (VAT), which contribute about 85 per cent of the revenue collection of the National Board of Revenue (NBR).
