Low Tax GDP Ratio in Bangladesh and Pakistan Hinders Economic Growth.
The tax systems in Bangladesh and Pakistan have low Tax GDP ratios compared to other SAARC countries. They heavily rely on indirect taxes like value added tax, customs duty, sales tax, and excise tax due to limited direct taxes. The contribution of indirect taxes to total revenue fluctuates. Tax evasion, avoidance, and poor tax administration are major issues affecting tax performance in both countries. However, there is potential for improvement through necessary reform measures.