This chapter identifies and evaluates the institutional causes of the failures of the tax system in Bangladesh. At less than 9%, Bangladesh is among the countries with the lowest overall average ratio of tax revenue to GDP. It follows that its fiscal space, that is the capacity to spend on public goods and correct rising income inequality, is extremely limited. The low average tax ratio results from both low nominal tax rates and a low rate of tax collection, itself due to pervasive tax evasion (often with the paid support of tax collection personnel) or to tax exemptions generously granted by the Government to its supporters. In addition, albeit in a limited way, taxation distorts economic incentives, either directly through non-uniform tax rates that favour some sectors or firms and penalise others, or indirectly through exemptions and evasion. This chapter also explores the reasons behind the difficulties that have surrounded previous attempts at tax reforms, and the underlying political economy factors. It, finally, lists the most attractive reforms in terms of increasing tax revenues, the effectiveness of tax collection, and the redistributive impact of the tax system.

This chapter identifies and evaluates the institutional causes of the failures of the tax system in Bangladesh. At less than 9%, Bangladesh is among the countries with the lowest overall average ratio of tax revenue to GDP. It follows that its fiscal space, that is the capacity to spend on public goods and correct rising income inequality, is extremely limited. The low average tax ratio results from both low nominal tax rates and a low rate of tax collection, itself due to pervasive tax evasion (often with the paid support of tax collection personnel) or to tax exemptions generously granted by the Government to its supporters. In addition, albeit in a limited way, taxation distorts economic incentives, either directly through non-uniform tax rates that favour some sectors or firms and penalise others, or indirectly through exemptions and evasion. This chapter also explores the reasons behind the difficulties that have surrounded previous attempts at tax reforms, and the underlying political economy factors. It, finally, lists the most attractive reforms in terms of increasing tax revenues, the effectiveness of tax collection, and the redistributive impact of the tax system.

This chapter traces the history of religious property tax exemptions, particularly in the Anglo-American common law and equity law traditions. It analyzes the perennial controversy around religious tax exemption in the history of America, and the constitutional defense of these exemptions that emerged with arguments from history, federalism, separatism, and the social benefits that exempt properties provide at ample state savings. Religious exemptions, however, are under fresh attack today, particularly for religious groups who maintain traditional sexual morality. The chapter reconsiders the constitutionality of such exemptions in light of recent First Amendment cases, and judges these exemptions still to be constitutionally valid and socially valuable, even if subject to legislative repeal.

This chapter transports us to Hellenistic Rome, and to the issuance of a legal privilege from the Senate of Rome to the polis of Delphi. The chapter shows how empirical formality and substantive rationality in law came together to enable ancient legal documents to work as instruments of legal power. In seeing how Rome deployed instruments of legal power - legal privileges that performatively created and memoralized patronage relationships with subordinated peoples - to forge an empire, we see how instruments of legal power were used to create governing communities and zones of exclusivity in Mediterranean antiquity. We also see how zones of exclusivity granted to city-states like Delphi are analogous to the zones of exclusivity granted to modern corporations like Facebook, in the form of intellectual property.