Bangladesh losing Tk1,235cr every year to tax abuse by multinationals, rich individuals

Bangladesh is losing $143.96 million or Tk1,235 crore in tax revenue every year to global tax abuse by multinational corporations and wealthy individuals, says a report by the global tax justice campaigners.

The Tax Justice Network, the Global Alliance for Tax Justice and the Public Services International jointly published the report titled "The State of Tax Justice 2021" on Tuesday.

The amount would be enough to inoculate 84 lakh or 5.3% of Bangladesh's total population against Covid-19, the report reads, adding that the estimated loss in the direct taxes is also equivalent to 14.52% of the country's public health expenditure.

The second edition of the report says corporate tax abuse accounts for $118.25 million or 82% of the tax losses, and the rest $25.71 million or 18% is due to offshore tax evasion by wealthy individuals.

Last year, the inaugural edition of the report revealed an annual tax loss of $703.40 million for Bangladesh. The latest edition said it declined to $143.96 million a year.

However, the report did not mention any specific fiscal year for the loss.

The total tax revenue losses were calculated based on data reported by multinational corporations and banking data collected by governments, according to the report.

Tax revenue loss: Bangladesh 3rd highest in S Asia

The report revealed that Bangladesh is the third highest country in South Asia, witnessing a tax revenue loss of $143.96 million, after India's $16.83 billion and Pakistan's $758.95 million.

The Maldives ($3.19 million) experienced the lowest amount of tax revenue loss per year in the region, followed by Bhutan ($27.09 million) and Nepal ($38.28 million).

Sri Lanka and Afghanistan – the other two nations of the region – are losing $77.92 million and $50.22 million, respectively.

However, the Maldives do not experience any corporate tax abuse, the report says.

Globally, countries are losing $483 billion in tax a year to global tax abuse which is enough to fully vaccinate the global population against Covid-19 more than three times.

The 38 member countries of the Organisation for Economic Co-operation and Development, a club for the rich nations, are responsible for 78% of global tax losses each year, while only the United Kingdom, together with its network of overseas territories and Crown Dependencies, accounts for over a third (39%) of the total losses.

In a press release, TJN's data scientist Miroslav Palanský said, "The $483 billion lost to tax havens a year is the tip of the iceberg. It's what we can see above the surface thanks to some recent progress on tax transparency, but we know there's a lot more tax abuse below the surface costing magnitudes more in tax losses."