Journals Proceedings

Abstract

Value-Added Tax (VAT) remains as a strong source of revenue generation in the economy of Bangladesh while tax evasion is rampant in the economy. Taxation is often unpopular and it even might hurt the economy if the tax revenues are not spent well by governments. Policies undertaken by the governments all over the world do not depend solely on benefit of the whole country but also depends on other factors. Personal benefit of politicians, election time, corruption etc. plays a significant role in designing and undertaking policies. VAT is an indirect tax and almost 38% of National Board of Revenue (NBR) revenue comes from it as per FY2011-2012. For the same fiscal year the income tax contributed almost 30% of revenues collected by NBR. The paper explores the literature and available data on tax morale – defined as the motivation of a country’s citizens to paying taxes. This paper takes a critical look at the Tax morale of the people of Bangladesh. The paper also puts tree diagram to suggest what happens when the government loses public credibility.