Bangladesh needs clearer revenue-sharing arrangements, stronger local tax collection and improved property valuation systems to expand domestic revenue mobilisation, Chinese tax expert Ping Zhang said on Thursday, drawing lessons from China’s reform experience.
The Policy Research Institute of Bangladesh (PRI) hosted a lecture titled “Taxation System and Reform in China: Lessons for Revenue Mobilisation in Bangladesh” at its conference room in Dhaka, bringing together policymakers, researchers, economists, business representatives and development practitioners.
Ping Zhang, vice dean of the School of International Relations and Public Affairs and director of the Public Budgeting Research Center at Fudan University, China, outlined China’s tax structure, legal framework and major reform phases during the session.
He said China relies heavily on indirect taxes, with value-added tax (VAT) as the largest source of tax revenue. Indirect taxes account for around 65 per cent of China’s tax revenue, while corporate income tax contributes 26 per cent and personal income tax 9 per cent.
Zhang highlighted key stages of China’s tax reform, including the 1984-1985 profit-to-tax reform for state-owned enterprises and the 1993-1994 Tax-Sharing System reform, which increased the central government’s share of national revenue from around 20 per cent to about 50 per cent.
He said the reform created a gap between local governments’ revenue and expenditure responsibilities, leading to greater reliance on central transfers and land-related revenues.
Zhang also discussed China’s “land finance” model, where local governments used revenues from land-use rights to fund infrastructure development and accelerate urban transformation.
Drawing lessons for Bangladesh, he suggested clearer division of revenue and expenditure responsibilities among different levels of government, conditional revenue-sharing arrangements for property-related revenues and modernisation of local revenue collection through better property valuation and enforcement.
The lecture was followed by a panel discussion involving experts from public finance, taxation, business, media and policy sectors.
The panel included PRI Distinguished Fellow Ahsan H Mansur, former Finance Division secretary Mohammad Muslim Chowdhury, Metropolitan Chamber of Commerce and Industry (MCCI) President Kamran T Rahman, legal economist M S Siddiqui, BRAC Institute of Governance and Development (BIGD) Professorial Fellow Sultan Hafeez Rahman and former National Board of Revenue (NBR) officials Md Farid Uddin, Jahangir Hossain and Ramendra Basak.
Others included PRI Executive Director Khurshid Alam, National Board of Revenue officials Md Moniruzzaman and Syed Golam Kibria, chartered accountant Snehasish Barua, senior journalist Monowar Hossain and PRI Principal Economist Ashikur Rahman.
The session was moderated by PRI Chairman Zaidi Sattar, who led the discussion on tax administration, compliance, fiscal decentralisation, property taxation, local revenue generation and challenges in expanding Bangladesh’s tax base.
