Bangladesh divides tax authority in IMF-backed reform

Bangladesh's interim government has dissolved the National Board of Revenue (NBR) and replaced it with two new divisions under the finance ministry, in a move to modernise tax administration and boost revenue collection.  

The restructuring, enacted through an ordinance last night, follows a key condition set by the International Monetary Fund to separate tax policy from administration. The Washington-based lender has long urged reforms to increase Bangladesh's tax-to-GDP ratio, one of the lowest in Asia.  

Under the "Revenue Policy and Revenue Management Ordinance 2025", the government will establish the Revenue Policy Division and the Revenue Management Division. The policy division will design tax laws, set rates, and oversee international tax treaties, while the management division will handle enforcement, audits, and compliance for income tax, VAT, and customs.  

The overhaul comes as Bangladesh seeks to strengthen public finances amid economic pressures, including dwindling foreign exchange reserves.

The interim administration, led by Nobel laureate Muhammad Yunus, has pushed the reforms to improve governance and efficiency. But some revenue officials have opposed the changes, arguing that the draft ordinance sidelines experienced tax and customs officers from policymaking roles.