A study by the Centre for Policy Dialogue (CPD) has found that Bangladesh’s property tax rate is one of the lowest in the world.
The study, which the European Union supported, found that the property tax accounts for only 0.27% of Bangladesh’s gross domestic product (GDP).
In comparison, the property tax accounts for 10% of GDP in Australia, Canada, the United Kingdom, and the United States.
The CPD study found that Bangladesh’s low property tax rate contributes to the country’s rising wealth inequality.
The study found that wealth accumulation per adult in Bangladesh increased by 3.66 times between 1995 and 2021. However, income growth only increased by 1.41 times during the same period. This indicates that the wealthy are getting wealthier much faster than the poor.
The CPD study recommends that Bangladesh increase its property tax rate to curb wealth inequality. The study suggests that the government collects land development tax and stamp duties based on the market value of land rather than the official rate, which is below the actual transaction value of land and properties.
The study also recommends that the government introduce an inheritance tax as a new source of direct taxes.
Land Minister Saifuzzaman Chowdhury said the government is considering increasing the property tax rate. However, he has said that the government needs to do so in a way that does not burden the poor.
The CPD study is an important contribution to the debate on addressing wealth inequality in Bangladesh. The study’s findings suggest that increasing the property tax rate is necessary to reduce wealth inequality and promote economic growth.