Bangladesh Bank Governor Ahsan H Mansur has emphasised the necessity of fully digitising the country’s tax system, warning that corruption in revenue collection will remain unchecked unless the value-added tax (VAT) and tax processes are entirely automated.
Speaking at a roundtable discussion titled “Challenges and Prospects of Digital Transactions: VAT Increase Perspective”, organised by the national daily Prothom Alo on Wednesday (29 January), he remarked, “I believe the current 15% VAT is too high for everyone to bear.”
He suggested that VAT should not exceed 10% across the entire supply chain—from import to production and final sale.
The governor noted that significant reforms in revenue management would require at least two to three years to implement.
“The current government will not have that time, but we will begin the process,” he stated.
Addressing concerns over inflation, he defended the effectiveness of existing policies, asserting, “Some say policies are not working, but I would say policy is working to control inflation. Even in developed nations, it takes 10 to 12 months to see the impact of measures. We expect to see positive results by June.”
He also highlighted the sluggish growth in bank deposits, warning that the current rate is alarmingly low.
“Deposit growth in Bangladesh's banking sector is very low at present. I believe it should be at least 14-16%,” he observed.
On the issue of digital transactions, the governor pointed out that the development of an interoperable platform had stalled under the Ministry of Finance.
