Taxes are the most important source of internal resource generation of a poor developing country such as Bangladesh. It plays a key role in realising the twin objectives of growth and equity of the developing economies. Hence the importance of tax policy. Divergence of effective taxes from nominal or statutory tax rates may be used as an indicator of discrepancy between the objective of a tax policy and its ultimate consequence. In this paper effective tax rates for indirect taxes in Bangladesh were estimated by using an economy-wide input-output table. It was found that the nominal indirect tax rates diverge substantially from the effective tax rates on various goods and services in Bangladesh.