A company, on an average, has to spend around 435 hours to comply with tax payments each year in Bangladesh, according to a recent global report.
The length of time for tax payments in Bangladesh is the second highest compared to other Asian peers and almost double the world average, it found.
At the same time, a company has to go through 33 rounds of payments to complete its tax procedure here, significantly higher than the global average of 23.8.
The findings were part of the annual 'Ease of Paying Taxes' ranking globally done by PricewaterhouseCoopers (PwC) in collaboration with the World Bank.
The report found that a company here has to spend 435 hours on tax compliance annually, including 144 hours on corporate tax and 120 hours on labour tax.
Consumption tax procedures takes up another 171 hours.
This is actually higher than any other countries in South Asia and almost double the global average of 237 hours, the PwC data showed.
In fact, Vietnam takes much more time to comply with taxes than Bangladesh, totalling 498 hours.
In contrast, it takes only 12 hours in the United Arab Emirates (UAE), 29 hours in Bahrain and 35 hours in Hong Kong to comply with tax matters.
The report found that a company in Bangladesh, on average, has to make five profit tax, 12 labour tax and 16 other tax payments as part of its tax compliance process.
This means a company has to go through 33 rounds of payments as part of its tax compliance here-almost one and half times higher than the global average of 23.
The report also found that it takes around 58 hours in Bangladesh to comply with a VAT refund -- which is three times higher than the global average of 19.6 hours.
It also takes 37 hours here to comply with a corporate income tax correction, which is two and a half times higher than the global average of 15.1 hours.
Meanwhile, it takes 17.91 weeks to obtain a VAT refund in Bangladesh, which is lower than the global average of 29 weeks.
Similarly, it takes 9.29 weeks to complete a corporate income tax correction which is significantly lower than the global average of 26.1 weeks.
About the issue, experts and insiders said the study findings reveal the harsh reality of the taxation procedure in Bangladesh.
"Cumbersome tax filing process seriously undermines the country's potential as an investment destination," said Ahsan H Mansur, executive director of Policy Research Institute.
"It also increases the cost of doing business in the country," he told the FE.
"The government has, up until now, failed to change the scenario because there is a vested interest group who wants to maintain the status quo," Mr Mansur added.
Insiders in the business circles observed that not only the tax filing process, but the tax auditing process is also quite lengthy and problematic.
"On many occasions, tax officials claim artificial and unjustified amount from business entities, causing further delay and harassment," said Abul Kasem Khan, president of Dhaka Chamber of Commerce and Industry.
"Such cumbersome process also creates scopes for corruption and irregularities," he pointed out.
"Moreover, those tax officials who are causing such hassles and delays hardly have any accountability," added Mr Khan of the country's leading business body.
"The general public feel discouraged to pay taxes due to such hassles. As a result, the country is failing to bring a wider segment of population under the tax net."
The experts also observed that the recent government move to automate the tax filing procedure is yet to bring any substantial improvement in the situation.
"Instead of running after a few big taxpayers, the government should look to increase the tax net," Mr Khan mentioned.
"The government has to be politically bold enough and they have to take a top-down approach to reform the taxation process," observed Mr Mansur.
Bangladesh has come out 151st among 190 countries that were part of this year's ranking.
Its giant neighbour India has been ranked 121st while Sri Lanka took 141st place.
Among the South Asian nations, Bhutan is at the top of the ranking, securing 15th place while the Maldives took 117th position.
Meanwhile, Nepal, Pakistan and Afghanistan have been placed behind Bangladesh, taking the 158th, 173rd and 177th places respectively.
Hong Kong has taken the top spot in the ranking followed by the UAE and Qatar.
Globally, the average time to comply has fallen by 84 hours and the average number of payments by 10.3 since 2004 -- both driven by technology, finds the PwC report.
The tax authorities could do more to realise the full potential of new technology to reduce tax compliance burdens on payers, said the report in its 13th edition.
