The impact of foreign direct investment inflows on the tax revenues in bangladesh


  • Subrata Deb Nath Department of Foreign Remittance, Local Office, Janata Bank Limited, Dhaka, Bangladesh
  • A. K. M. Firoz Alam Department of Foreign Remittance, Local Office, Janata Bank Limited, Dhaka, Bangladesh
  • Munna Rani Biswas Office of the Deputy Commissioner, Moulavi Bazar, Sylhet, Bangladesh


Bangladesh, FDI inflow, impact, tax revenue


Purpose: Now-a-days, domestic capital alone is not enough for economic development of a developing country. Developing countries in fact, seek adequate Foreign Direct Investments always. Although indirect tax increases through FDI inflows, but direct tax does have a negative influence on FDI inflows. This research investigates the impact of FDI inflows on tax revenues in Bangladesh. Methodology: The study has been completed based on time series data for the period of 2001–2020, where we considered tax revenue as a dependent variable, and FDI inflow as an independent variable. We also used the simple regression analysis technique for analyzing our data. Findings: The results reveal that FDI inflows do have a positive influence on tax revenues, by which, we can affirm that one unit change in independent variable (FDI inflow) increases tax revenues in Bangladesh by 8.22 units. Implication: Policy makers, economists, and regulators like NBR along with new researchers shall get an important insight about the impact of FDI inflows on tax. Originality: There is hardly any study available on this subject in the context of Bangladesh. Thus, to the best of our knowledge, this is a pioneering attempt, aiming to analyze the impact of FDI inflows on the tax revenue in Bangladesh.


Abdioglu, N., Binis, M., & Arslan, M. (2016). The Effect of Corporate Tax Rate on Foreign Direct Investment: A Panel Study for OECD Countries. Herning, Denmark: EGE Academic Review. p599-610.

Ahmed, F., Monsur, A., Eyasmin, S. Mitu, M. P., & Rahman, T. (2021). Bangladesh Economic Review 2021, Finance Division. Bangladesh: Ministry of Finance, Government of the People’s Republic of Bangladesh.

Ali, N., & Hussain, H. (2017). Impact of foreign direct investment on the economic growth of Pakistan. American Journal of Economics, 7, 163-170.

Amin, S. B., Khan, F., Shahnaz, F., & Chowdhury, M. T. (2018). Tax revenue and foreign direct investment in Bangladesh: An empirical analysis. World Review of Business Research, 8(3), 61-69.

Bayar, Y., & Ozturk, O. F. (2018). Impact of Foreign direct investment inflows on the tax revenues in OECD countries: A panel cointegration and causality analysis. Theoretical and Applied Economics, 25(1), 31-40.

Binha, O. (2021). The impact of foreign direct investment on tax revenue growth in Zimbabwe (1980-2015). International Journal of Scientific and Research Publications, 11(1), 16-43.

Camara, A. (2019). The Effect of Foreign Direct Investment on Tax Revenue in Developing Countries. Bengaluru: HAL-03188025. p1-30.

Koluman, E. (2020). What is Foreign Direct Investment: Definition, Numbers and Protection Opportunities. Turkey: KolumanLaw.

Macrotrends. (2022). Bangladesh Foreign Direct Investment 1972-2022. Retrieved March 15, 2022 from:

Mahmood, H., & Chaudhury, A. R. (2013). Impact of FDI on tax revenue in Pakistan. Pakistan Journal of Commerce and Social Sciences, 7(1), 59-69.

Nasreen, S., Fazal, U., Pirzada, S. S, Khanam, F., & Tariq, S. (2014). Impact of foreign direct (FDI) on economic growth of Pakistan. Journal of Economics and Sustainable Development, 5(11), 143-149.

Nistor, I. A., & Paun, D. (2013). Taxation and its effect on foreign direct investments-the case of Romania. Nauki O Financial Sciences, 3(16), 37-47.

OECD. (2008), OECD Benchmark Definition of Foreign Direct Investment. 4th ed. Paris, France: OECD. Last accessed on Jun 2022 Retrieved from

OECD. (2022), Tax Revenue-OECD Data. Retrieved April 07, 2022 from>tax>tax-revenue

Pratomo, A. W. (2020). The effect of foreign direct investment on tax revenue in developing countries. Journal BPPK, 13(1), 8-95.

Sujarwati, A. I., & Qibthiyyah, R. M. (2020), Corporate income tax and foreign direct investment: A cross country empirical study. Economics and Finance in Indonesia, 66(1), 25-46.

The World Bank Indicator. (2020), Tax Revenue (% of GDP)-World Bank Data. Retrieved March 15, 2022 from>GC.TAX.TOTL.GD.ZS




How to Cite

Subrata Deb Nath, A. K. M. Firoz Alam, & Munna Rani Biswas. (2022). The impact of foreign direct investment inflows on the tax revenues in bangladesh. Indian Journal of Commerce and Management Studies, 13(02), 16–20. Retrieved from