Question-1 Suppose the estimated tax effort index and buoyancy value for the four developing countries are reported below: Country Tax Buoyancy Tax Effort Bangladesh 1.40 0.52 India 1.20 0.61 Indonesia 1.01 0.80 Philippines 0.85 0.84 Which country has higher tax potential if they plan to further reform in tax system? Why the tax effort index is lower for Bangladesh? Explain your answer. Question-2 Explain the theory of tax evasion by using diagram Suppose, Bangladesh government has announced to increase income tax rate. Do you think that this policy will decrease tax evasion? Discuss this issue by using diagram based on the theory of tax evasion. [ Do the same exercise in case of increasing or decreasing penalty?] Question-3 Suppose that the tax rate is 25%. Suppose also that the probability of getting caught evading taxes is 10% plus an additional 4.0% for every $1,000 in tax evasion. Individual who are caught