World Journal of Social Sciences Vol. 4. No. 3. October 2014 Issue. Pp. 149 – 161 The Tendency toward Tax Evasion in Bangladesh Rashedul Hasan* Tax evasion has always been practiced among tax payers in Bangladesh. But the actual reason for this practice has always remained a mystery. This research has taken the initiative to find a possible reason for such behavior among current tax payers in the country. A structured questionnaire was used among 300 tax payers to collect primary information which was later broken down through the usage of SPSS to reach at a justified end. Few hypotheses were generated and tested using the primary data and in most cases the null hypothesis were accepted. A model was developed, including a dependent variable and eleven independent variables (categorized as demographic and intellectual). The model was found significant for this research by conducting a regression analysis. Finally a correlation analysis was done between dependent and selected independent variables to generate a statistical conclusion of this paper. The core aim of this inquiry was to share some insight about the tax evasion tendency in Bangladesh and to motivate interested partied in taking appropriate action. Keywords: Tax Evasion, NBR, Ethics 1. Introduction Tax has always been the primary source of revenue for Bangladesh. Government of our country tries to meet its ever increasing expenditures primarily public service, defense, education, technology, agriculture, infrastructure by imposing multiple tax on people working and earning money inside the country. From the year - end report on fiscal position it is found that the total actual expenditure for the income year 2011 – 12 by the government was Tk. 15,81,900 million which was 17.31% higher than the last financial year. On the other hand, tax revenue collected by the Government was Tk. 11,38,700 million in the financial year of 2011 – 12. As a result, a gap of Tk. 443,200 million existing which our government will have to fill up with foreign aid and money borrowed from the World Bank. Although, the collection of tax revenue has increased from 2008 to 2012, it is surprising to see that tax gap has also increased every year. It cannot be denied that our economy is growing everyday and more people are now having taxable income. In such a situation, one of the many reasons why income and expense gap of our country is not decreasing over the year is the tax evasion tendency of our taxpayers. As we pay tax without the expectation of any direct return, it is obvious that more and more taxpayer will lose interest in paying the Government a portion of their hard earned income when any indirect benefit becomes difficult to find. Money whitening facility is not helping either as it discourages honest taxpayers to report and pay the appropriate amount of tax. Considering the emergency and the importance of this issue, this research was conducted to share some insight regarding tax evasion in Bangladesh and also tried to identify possible reasons that influences tax evasion tendency among current tax payers of Bangladesh. *Assistant Professor, Department of Accounting, American International University – Bangladesh, Bangladesh. Email: hasanaiub05@gmail.com