Bangladesh’s tax system needs overhauling to support fair and sustainable growth. Currently, tax revenue is a small share of GDP (under 8%), in part because many exemptions narrow the base. The IMF notes Bangladesh faces “low tax compliance” and a narrow base due to numerous deductions. Broadly, South Asia as a whole collects less tax revenue relative to GDP than other regions. To change this, Bangladesh could simplify its tax structure (e.g. fewer slabs, fewer exemptions) and strengthen enforcement. Expanding the VAT net and improving income tax compliance can raise revenue without necessarily hiking rates. Importantly, reform should be made progressive: richer taxpayers should bear more of the burden to finance social programs. In sum, fair and efficient tax reform can mobilize the resources needed for public investment and reduce inequality, aligning with the push to strengthen domestic resource mobilization