A newly convened expert taskforce has called for a comprehensive overhaul of Bangladesh’s trade tax system, declaring the current structure “archaic and obsolete” and urging reform as essential for long-term economic growth and competitiveness.
The National Task Force for Tax Reforms (NTFTR), established by the interim government, has proposed a lengthy programme to reduce the share of trade taxes in total government revenue from about 28% currently to approximately 7.5% by 2035 — a level more in line with international norms.
According to the taskforce’s findings, finished consumer goods in the latest financial year faced average nominal protection rates nearly 2.4 times higher than intermediate inputs, creating a structural bias that hinders export diversification and domestic value addition.
“Lower trade taxes will reduce anti-export bias, encourage domestic value addition and better integrate Bangladesh into global value chains,” the body said in its report, which was submitted earlier this year to the Chief Adviser of the interim government.
The report highlights that while Bangladesh has significantly reduced reliance on trade levies since the 1970s — when they accounted for around 70% of revenue — the proportion remains elevated compared with peer economies. High and complex trade duties, amplified by myriad para-tariffs such as regulatory and supplementary duties, have inflated effective rates and distorted market incentives.
Local business leaders expressed mixed views: some advocate for tariff protection to support nascent industries, while others agree that reform could enhance export competitiveness without jeopardising fiscal stability.
The taskforce’s proposals are part of a broader fiscal reform agenda that seeks modernisation of the tax system, promoting a more dynamic, trade-oriented economy and paving the way for sustainable job creation and inclusive growth.
