The recent decision by the National Board of Revenue (NBR) to freeze the bank accounts of eight private universities is misguided and short-sighted on so many levels that it is hard to know where to begin.
In the first place, it is part of the long-standing trend of the NBR of targeting legitimate entities instead of addressing the real issues plaguing revenue collection in Bangladesh. Instead of cracking down on those evading taxes or expanding the tax net, the strategy is to squeeze as much as possible out of existing law-abiding tax-payers. This latest fiasco is the inevitable end result of such folly.
Let us start with the 15% tax to be levied on private universities to begin with. Out of all the institutions to be squeezed for tax revenue, does it really make sense to go after the ones that are providing an invaluable educational service to the youth of the country? What could be more short-sighted and counter-productive than that?
The NBR’s woes with regard to revenue collection have been well documented. Their modus operandi each fiscal year has been a string of poor decisions, from setting unrealistic revenue expectations to then resorting to squeezing honest taxpayers of their last taka while letting powerful and connected individuals and establishments walk scot-free with no consequences and, more importantly, zero taxation.
However, this latest decision to freeze the bank accounts of eight private universities may take the cake with regard to poor decision-making. How exactly are the universities meant to pay salaries if their accounts are frozen? Who does the NBR think will suffer the most if teachers do not get paid? What will be the impact on students if their teachers are not paid?
It is frankly hard to think of a course of action that is more ill thought-out or that is guaranteed to lead to a worse outcome, both in the short- as well as long-term. This is not just a poor decision, it is the absolute opposite of what any thinking body should do in such an instance.
Furthermore, such an approach just before Eid, when teachers and university staff are waiting anxiously to receive salaries and bonuses, shows a shocking lack of empathy and judgment. The fact that those who will be the hardest hit are the teachers and staff seems to have escaped the decision-makers entirely, which leads one to wonder on what basis they are making decisions at all.
Already a body with an unfavourable reputation, this taxation of universities and the ham-fisted way in which it is being enforced has only further undermined the credibility of the NBR, and there are serious questions about its priorities and competence. Instead of focusing on improving tax collection mechanisms and tackling tax evasion, the NBR seems more interested in adding to the woes of businesses and institutions that are contributing to the country's development. This time they have sunk to a new low.
It is high time for the NBR to reassess its approach to revenue collection. Resorting to draconian measures that harm the nation’s development is surely not the way.