ActionAid estimates tax treaties deprive Bangladesh of $85 million annually

Bangladesh is giving away millions of US dollars through “mistreated” tax treaties with foreign companies, a study by an NGO finds.

The ActionAid study estimates that the absence of a related clause in the treaties deprives Bangladesh of $85 million annually.

The NGO’s Bangladesh chapter came up with the findings during a discussion on the study in Dhaka on Saturday.

ActionAid Bangladesh official Asgar Ali Sabri presented the findings of the study - ‘Mistreated: The tax treaties that are depriving the world’s poorest countries of vital revenue’.

According to her, Bangladesh's inability to levy withholding taxes on dividends paid to overseas shareholders is costing the loss.

In the discussion titled, ‘Mistreated Tax, Untreated Budget’, the chief of the parliamentary standing committee on finance ministry Abdur Razzak admitted that the government is not “even clever and skilled enough to collect direct taxes like corporate tax”.

“We also have to give chances to the foreign investors,” he said.

ActionAid Bangladesh Country Director Farah Kabir said the corporate bodies were exploiting the lack of capability.

“But it’s not reasonable to give them the chance to evade taxes for the sake of investment,” she added.