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Experts Urge Property Tax Increase

Industry: Housing, Real Estate

The Centre for Policy Dialogue (CPD) and analysts have emphasized the need for an increase in property tax to curb rapid wealth accumulation and rising inequality in Bangladesh. The country currently has one of the lowest property tax rates globally, with property tax accounting for only 0.27% of GDP, similar to African countries. Over the past five years, the share of property tax in overall revenue collection has been declining. In comparison, countries like Australia, Canada, the United Kingdom, and the United States generate more than 10% of their total tax revenue from property taxes.

CPD Distinguished Fellow highlighted the importance of aligning property tax with economic growth, suggesting that wealth taxation should receive more focus than income taxation. Rising income and wealth inequality in Bangladesh further supports the need for wealth tax collection. As the country transitions from the category of least-developed countries, the income level and wealth accumulation are expected to increase, making property tax a potential source of revenue.

To address these issues, experts recommend collecting land development tax and stamp duties based on the market value of properties. They also propose introducing an inheritance tax as a new source of direct taxes. Implementing these measures can help reduce inequality, encourage economic growth, and ensure affordable housing for the population.

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