Impact of Tax Evasion and Tax Avoidance on Economic Growth as Per Income Tax Act in Bangladesh

Abstract

The present report endeavours to examine the noteworthy incentives and mechanisms of tax evasion and avoidance in Bangladesh, as well as strategies for mitigating these issues. Additionally, efforts have been made to determine the source of tax evasion and avoidance as well as the extent of their negative effects on Bangladesh's economy. Where there is "tax" in Bangladesh, there is also "tax evasion" and "tax avoidance." They actually get along well with one another. One of Bangladesh's main sources of income is taxes. However, our nation's tax payment culture is really depressing. Our nation lost a significant amount of revenue as a result of tax evasion and avoidance. which have been seriously harming our nation's economy. Moreover, the impact of tax evasion and avoidance extends beyond mere revenue loss. It hampers the government's ability to fund essential public services, such as education, healthcare, and infrastructure development, thereby impeding overall socio-economic progress. The unequal distribution of the tax burden, where certain sectors or income groups evade their fair share, exacerbates existing disparities within the society, hindering the government's efforts to promote inclusivity and social justice. The detrimental effects of tax evasion and avoidance are further exacerbated by the unequal distribution of the tax burden. Certain sectors and income groups, through their evasion of a fair share of taxes, contribute to the widening disparities within our society. This regressive phenomenon directly contravenes the government's aspirations for inclusivity and social justice, hindering its earnest endeavors to create a more equitable and harmonious socio-economic landscape. In the face of these challenges, the road ahead demands a united front from policymakers, tax authorities, and the citizens of Bangladesh. Implementing robust reforms in tax legislation, enhancing enforcement mechanisms, and fostering a culture of tax responsibility are imperative steps. Consequently, a concerted and multifaceted approach is imperative to rectify these issues, encompassing not only legal and regulatory reforms but also initiatives to cultivate a culture of tax compliance and civic responsibility. In conclusion, the issue of tax evasion and avoidance in Bangladesh is not merely an economic challenge but a deeply rooted systemic concern that requires comprehensive and sustained efforts. Addressing the root causes, fostering a culture of tax compliance, and engaging in international collaborations are indispensable components of a holistic strategy. By undertaking these measures, Bangladesh can pave the way for a more resilient and equitable fiscal landscape, fostering sustainable economic growth and societal well-being.