Leaders of the protesting National Board of Revenue (NBR) Reform Unity Council on Sunday called off a full-fledged strike in all offices of the Tax, Customs, and VAT Department which was slated to begin May 26 (Monday).
The strike was called off after assurance from the Finance Ministry that the ordinance to split the NBR will be amended by 31 July after consulting with key stakeholders, keeping the interests of the protesters.
"However, our second demand — the immediate removal of the current chairman of the NBR remains unfulfilled. We hope the government will take a positive decision on this demand soon," the NBR Reform Unity Council, a coalition of customs and tax cadre officers that has been leading the protest, said in a press statement later on the day.
The NBR Reform Unity Council also expressed its regret to taxpayers and service seekers for the temporary inconvenience caused during the movement.
“We are in favor of separating revenue policy and management. But it must be realistic, based on the opinions of stakeholders, and through the highest evaluation of the skills and experience of officials and employees,” the protesters added.
The protests began after the NBR Reform Unity Council rejected the Finance Ministry's promise that it would amend the Revenue Policy and Revenue Management Ordinance, which seeks to dissolve the NBR and form two divisions separating tax policymaking from administration.
Damage control
Meanwhile, the Finance Ministry issued a statement on the day, where they reaffirmed their commitment not to repeal the NBR Ordinance.
“The NBR Reform Unity Council demanded that the NBR separation ordinance be repealed. However, the government does not want to repeal it. It wants to bring necessary amendments. For this, a deadline of July 31 has been set.”
“All necessary amendments will be brought to the ordinance issued by July 31 with the aim of strengthening the National Board of Revenue and separating the revenue policy formulation activities. The ordinance issued will not be implemented until the necessary amendments are made. However, the NBR Reform Unity Council has not yet made any decision on this announcement by the Ministry of Finance.”
They also released a press note on May 22, where it stated that the government hoped that all the concerns of the NBR’s tax and customs and VAT services regarding the ordinance would be put to rest.
“But from the recent press release of the NBR Reform Unity Council, it appears that some ambiguity remains in this regard. In this context, further clarification is made in this regard as follows: NBR will be elevated as an independent and specialized department of the government; there will be a separation of revenue policy by forming a specialized institution while keeping the interests of the BCS (Customs and Excise) and BCS (Tax) cadres intact; and all necessary amendments will be made to the issued ordinance by July 31, 2025. The issued ordinance will not be implemented until the necessary amendments are made.”
Revenue loss
Revenue collection is usually between Tk1,500 and Tk2,000 crore per day during this time of the year before the budget announcement.
But due to the ongoing work abstention by NBR officials, there will be a major collapse in revenue collection in May, sources said.
Data suggests that due to the movement, only Tk 9,437 crore was collected in the first 18 days of May.
But now it’s become worse because the previous pen-down strike (10 am to 3 pm) has now become work abstention.
The revenue collection in May last year was about Tk31,000 crore. If the collection was increased compared to this time, at least Tk35,000 crore was supposed to be collected in May.
In a press briefing on Sunday (May 25), Monalisa Shahrin Susmita, NBR joint commissioner, told the media: “This time of the year, revenue of Tk1,500 to Tk2,000 crore is usually collected every day. Now you can understand how this can affect revenue collection.”
Background
On May 13, the government proceeded with the reforms, officially dissolving the NBR and establishing two separate entities, the Revenue Policy Division (RPD) and the Revenue Management Division (RMD).
The next day, agitated NBR officials began a pen-down strike and then suspended it on May 19.
Last Wednesday (May 21), they announced a series of programs, including ongoing non-cooperation with the NBR chairman, to press home their demands.
Their demands are repealing the ordinance to dissolve the NBR, removal of the NBR chairman, publication of the Revenue Reform Advisory Committee's recommendations on the NBR website, and ensuring appropriate and sustainable revenue system reforms through review and discussion with all relevant stakeholders.
Dr Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue (CPD), criticized the process of dividing the National Board of Revenue (NBR) into two divisions.
“It was right to divide the National Board of Revenue into two parts. This was also recommended in our white paper. But the way it has been done is not right,” he said on May 19.
According to him, the method of division was flawed as it reduced the space for professionals without proper discussion and maintained excessive control over other autonomous areas.
Ensuring a proper division has become a critical issue now, he remarked.