Fiscal Panorama of Financing Sustainable Development in Bangladesh: The Role of Non-Tax Revenue Sources.

Abstract

The COVID 19 Pandemic crisis, worsened by the recent Ukraine war, have unleashed an enormous financing pressure on Bangladesh government to achieve the accelerated, inclusive, and resilient growth required for sustainable development. With the onset of fuel price hike, dollar crisis, power shortage, rising inflation rate, and the economic recession, the pre-pandemic steady and remarkable annual GDP growth has already been stumbled. Despite several reform measures, the Tax-GDP ratio in Bangladesh has reached to only 8.7% in FY 2021-22 (one of the lowest among similar economies) that prompted the failure of not achieving the government's 7th Five-Year Plan Target Tax-GDP ratio of 14.1 by 2020. To mitigate the severe financing constraints for sustainable development landscape, non-tax revenue sources can play a pivotal role as an important alternative revenue source for government, if addressed properly. The study used a qualitative approach to provide an insight into the status of Bangladesh non-tax revenue structure, it's opportunities and challenges in financing the SDGs. The contribution of non-tax revenue is almost stagnant for a past several (slightly above 1% of the GDP) with a decreasing trend years. Revenue from most of the non-tax sources are found volatile with inconsistent growth. Some of the commonly reported barriers include lack of monitoring by any specific authority or body, limited reform initiatives, incompetency of government owned corporations, lack of skilled manpower in concerned departments, misuse of resources, lack of appropriate infrastructure, and lack of coordination among concerned government bodies. The findings of this study would help the policymakers to understand the importance of non-tax revenue collection and to design effective and customized reform initiatives as it is yet a neglected and untapped source of government revenue. This would also open avenues for further study on financing alternatives for SDGs.