New Delhi, Jan 10 (IANS) Without a shift in the policy framework, inequality will remain entrenched in Bangladesh as there is still no sign of meaningful change in supporting policies in the country, a new report has stressed.

The top 1 per cent now hold 24 per cent of the total wealth and pocketed 16 per cent of the national income in 2024, according to the ‘World Inequality Report’.

Ahsan Habib writes in The Daily Star that in Bangladesh, the tax system remains stubbornly regressive.

“The country relies heavily on value-added tax (VAT), a consumption tax that hits the poor hardest, rather than income tax. There is no inheritance tax, a standard tool in the West for preventing dynastic hoarding of wealth. In the 2023-24 budget, the surcharge-free limit on wealth was actually raised to Tk 4 crore from Tk 3 crore, offering further shelter to the rich,” the report mentions.

Economists say that a change of government is not enough to solve the problem.

According to Anu Muhammad, former chairman of the economics department at Jahangirnagar University, without a shift in the policy framework, inequality will remain entrenched.

“Tax policy should have been progressive and centred on income tax. Instead, it depends heavily on VAT. At the same time, the social safety net remains shallow, while education and healthcare continue to be costly for people,” Muhammad was quoted as saying in the report. “If black money and laundered funds are included in the accounts, inequality would be much deeper.”

Bangladesh is stuck on the upward slope. The Gini coefficient, a measure of inequality where 0 is perfect equality and 1 is perfect inequality, has marched steadily upward, the report argues.

In 1974, the country sat at a Nordic-like 0.36. By 2022, income inequality had hit 0.50, while wealth inequality soared to a staggering 0.84.

“The reason for this stickiness is political capture. The mechanism for redistribution — tax policy — has been hijacked by those it is meant to tax,” said the report.

The labour market in Bangladesh reflects the same imbalance. About 85 per cent of jobs come from the informal sector, many without contracts, job security or adequate leave.

–IANS

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