Simple automation of Value Added Tax (VAT) collection system in Bangladesh can bring Tk 10,000 crore additional revenue per year. This would also increase the country's tax-GDP ratio by one percent. This was disclosed by a recent study conducted by Copenhagen Consensus Center. The study suggested automation of VAT abolishing the existing tariff setting process. "Strengthening the tax base would help the government improve public services that Bangladeshis rely upon," said Dr. Bjorn Lomborg, President of the Copenhagen Consensus Center. "Bangladesh Priorities can help find the solutions that can do the most good for Bangladesh when it comes to mobilizing resources for government," he adds. Bazlul H. Khondker, a professor of Economics at the University of Dhaka, and Biplob Kumar Nandi, a senior lecturer of economics at East West University, find that modifying the VAT and its collection is one of the most promising strategies to mobilize more resources for government. According to the study, the existing government tax revenue is equal to just 11 percent of the size of the entire economy in Bangladesh. So despite the fact that the country has great potential to boost revenue earnings, much of it goes untapped. Over the next five years, the government aims to increase this tax-GDP ratio to 14 percent. The study suggested streamlining the tax-filing process to make it much easier to comply with tax regulations and to file returns. After automation the vendors would be able to use an electronic submission and return process. This would lower the costs of complying with the tax code, and the researchers estimate that the number of registered online VAT payers would increase from 35,000 to 85,000-fully 50,000 more companies would voluntarily pay their taxes. This change would raise tax revenue by Tk 2400.2 crore.When it comes to strengthening the tax base, the VAT is a crucial issue, because revenues collected from it and income tax combine to account for 70 percent of all tax revenue. The economists first analyzed a change the way that the 15 percent VAT is calculated. Currently, the National Board of Revenue (NBR) sets tariff values for all goods and services, and these values consequently determine VAT revenues. Replacing those tariff values with actual market prices would have a significant effect, because the NBR undervalues many goods and services-the change would more than double VAT revenue, adding Tk 7600.4 crore in tax revenue. The second part of the strategy relates to automating the system by which the government collects the VAT. The true benefits of mobilizing more government resources, however, would depend entirely upon what the extra tax revenue accomplishes. The analysis assumes that the additional funds are most likely to be spent on infrastructure projects that Bangladesh greatly needs-road and rail transportation, the electrical grid, and water supply systems.