The government is on the path of major reforms to overcome the long-standing structural weaknesses of the National Board of Revenue (NBR) to make tax administration more efficient and effective. As part of this, a plan has been taken to split the NBR into two. In the new structure, the responsibilities of revenue policy formulation and revenue management will be handled by two separate divisions.
Finance and Planning Minister Amir Khasru Mahmud Chowdhury announced the plan at a function in the capital on Sunday (June 21).
He said that this reform initiative has been taken to increase the country's tax-GDP ratio, increase efficiency in revenue collection and ensure accountability in tax administration. For a long time, the current structure of the NBR has been suffering from various limitations in policy formulation and implementation.
The government hopes that it will be possible to eliminate those weaknesses through the proposed restructuring.
The finance minister said: “NBR is a problem that we have to solve. We are going to divide it into two parts. There will be a separate body for policy formulation and another separate body for management.”
According to the government’s plan, the Revenue Policy Division will formulate tax policies completely independently. On the other hand, the Revenue Management Division will implement those policies and manage administrative activities. As a result, a clear division will be created between policy formulation and implementation, which is in line with international practices of modern tax administration.
Amir Khasru Mahmud Chowdhury said that the responsibility of formulating tax policies will not be limited to bureaucrats. Rather, tax experts, economists and people with deep knowledge of the country’s socio-economic reality will be involved in the policy formulation process.
He said: “The policy formulation stage is not going to be managed by bureaucrats. We want tax experts and those who understand Bangladesh and the people of this country to come into the policy formulation process.”
According to the minister, one of the biggest problems in Bangladesh’s tax system is weak policy formulation. If the right and timely policy is adopted, it will be possible to eliminate many complications in tax administration.
He said: "If the place for policy formulation can be fixed at the beginning, then at least 50 percent of the problem will be solved."
Those concerned believe that if this government initiative is implemented, the capacity and effectiveness of the tax administration will increase.
At the same time, the minister hoped that it can also play an important role in creating a taxpayer-friendly environment, increasing revenue collection and improving the long-standing low tax-GDP ratio.