A recent Tax Justice Network (TJN) report reveals that multinational companies are causing Bangladesh to lose approximately $361 million in tax revenue annually.
The report, titled ‘State of Tax Justice 2023,’ also highlights an additional loss of $26 million annually due to global tax evasion by private individuals.
The lost total represents 0.1% of the country’s Gross Domestic Product (GDP).
The TJN, a coalition of individuals and organizations advocating for a fairer tax system, estimates that these companies shift around $1.4 billion in profits out of Bangladesh yearly.
The report provides country-specific assessments of tax losses from cross-border tax abuse by multinational corporations and individuals using offshore tax havens.
According to the findings, Bangladesh’s annual tax loss accounts for $387 million, equivalent to 1.5% of its total tax revenue, surpassing the regional average. This figure is also significant in national spending priorities, amounting to nearly one-third of the health budget or 6.19% of education spending.
The report highlights the global scale of tax abuse, indicating that countries worldwide collectively lose $472 billion in tax revenue annually.
Multinational corporations are responsible for $301 billion of these losses, achieved by shifting profits into tax havens.
Meanwhile, $171 billion is lost due to individuals hiding wealth offshore.
Notably, lower-income countries, historically underrepresented in global tax rule discussions, bear the brunt of these losses.
While higher-income countries experience most of the annual tax losses ($426 billion), lower-income countries’ losses amount to $46 billion, surpassing half of their public health budgets.
As globalized economies continue to be impacted by tax havens, experts urge smaller economic powers like Bangladesh to invest in technical aspects of international taxation and pursue diplomatic efforts to address the issue effectively.