Assignment taxation

Merits of taxation in world

Demerit of taxation in world

Merits of taxation Bangladesh:

 Government Revenue: Taxes are an important source of government revenue in Bangladesh.

 Poverty Reduction: Taxes benefit the most vulnerable sections of the population
 Infrastructure development: Taxes play an important role in financing infrastructure projects
 Stability and Economic Growth: Government contributes to economic stability through taxation.

Demerit of taxation in Bangladesh:

• Informal Economy: Revenue loss due to tax evasion and avoidance.

• Complex tax structures: Complex tax structures can increase compliance costs
• Corruption: Corruption reduces the effectiveness of taxes. Tax evasion, bribery, obstacles to fair
and efficient revenue collection.
• Lack of public awareness: Lack of awareness about tax policies among the general public

1. Informal Economy:
 Challenge: A large portion of economic activities in Bangladesh operates
informally, beyond the reach of formal taxation.
 Example: Many small businesses, street vendors, and service providers may not
be registered for tax purposes. As a result, they may not contribute to the tax
revenue despite participating in economic transactions.
2. Complex Tax Structures:
 Challenge: The tax system in Bangladesh can be intricate, posing challenges for
businesses and individuals to comply with regulations.
 Example: The Value Added Tax (VAT) system in Bangladesh has undergone
changes and revisions, sometimes making it challenging for businesses to
understand and implement. Complex VAT regulations can lead to errors in
compliance and increase the administrative burden on businesses.
3. Corruption:
  Challenge: Corruption within the tax administration undermines the fairness and
effectiveness of tax collection.
 Example: Instances of bribery or irregularities in the tax collection process can be
observed. Businesses or individuals may attempt to influence tax officials for
favorable treatment, distorting the equitable distribution of the tax burden.
4. Lack of Public Awareness:
 Challenge: Limited awareness among the public about tax policies can lead to
resistance and non-compliance.
 Example: Some taxpayers may not fully understand the different components of
their tax liabilities. This lack of awareness can result in unintentional non-
compliance, such as underreporting income or failing to claim eligible
deductions.