International Monetary Fund, 2006, Bangladesh: Fifth Review Under the Poverty Reduction and Growth Facility, and Request for Waiver of Performance Criteria, Extension of the Arrangement, and Rephasing, IMF Staff Country Report, No. 06/406 (Washington).
Poirson, Hélène, 2006, “The Tax System in India: Could Reform Spur Growth?” IMF Working Paper, No. 06/93 (Washington: International Monetary Fund).
Prepared by Noriaki Kinoshita (FAD).
IMF Country Report, No. 06/406, November 2006, Annex I.
Using the data from the LTU, the implied weighted average of CIT rates is estimated at 44 percent.
The revenue productivity refers to the tax-to-GDP ratio divided by the applicable nominal tax rate. It should be noted that low tax productivity can follow from a low share in GDP of the tax base in question, before account is made of tax relief (for example, business profits or consumption as a share of GDP). But not all tax bases can have a low share of GDP, and it is noteworthy that tax productivity is relatively low for all types of taxes in Bangladesh compared to the sample countries.
The methodology applied for comparator countries is described in IMF Working Paper No. 06/93. For Bangladesh, the ratio of individual income tax to compensation of employees is used as an indicator for the AETR on labor, the ratio of corporate income tax to the net operating surplus of the whole economy for the AETR on capital, and the ratio of taxes on domestic goods and services and international trade taxes to final consumption (excluding government wage consumption) as a proxy for the AETR on consumption.