Bangladesh, Feb. 22 -- Sustainable public finance depends not only on how much revenue a government seeks to raise, but also on how that revenue is collected. Well-designed tax systems balance ambition with realism: they generate predictable income for the state while remaining administratively enforceable and economically viable for compliant businesses. When that balance is lost, higher rates do not necessarily translate into higher collections. Instead, they can weaken compliance, shrink formal activity and undermine the very revenue objectives they aim to achieve.

This challenge is particularly relevant for economies that rely heavily on indirect taxation. While indirect taxes are relatively easier to administer and collect, excessiv...