Finance adviser sees no impact on tax collection from NBR dissolution

Finance Adviser Salehuddin Ahmed today said there will be no effect on revenue collection due to the commotion among tax officials over the dissolution of the National Board of Revenue (NBR) and the separation of tax policymaking from administration.

"There will be no effect. Revenue collection increased 2 percent year-on-year in the current fiscal year 2024-25. So, it is not frustrating. Tax collection will not be lower than the previous year," he told reporters after a meeting of the advisers' committee on government procurement at the secretariat.

His remarks came a day after the interim government issued an ordinance abolishing the NBR and creating two separate divisions under the finance ministry, in a move to modernise tax administration and boost revenue collection.

The restructuring follows a key condition set by the International Monetary Fund to separate tax policy from administration. The Washington-based lender has long pushed for tax reforms to raise 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 draft 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.

Revenue officials have opposed the move, arguing that the ordinance favours administration cadre officials for top positions in both divisions.

Responding to journalists, Salehuddin said the interests of revenue officials have been safeguarded. "A very small division to frame tax policy will be established. So, they have no reason to be worried," he said.

"Internationally, policy and implementation divisions remain separate," he added.

"A policy division requires people who have knowledge of issues such as the economy, statistics, and GDP. If the NBR frames policy and also implements it, it creates scope for a conflict of interest," he said.

"The ordinance has been framed with a lot of consideration," he said, rejecting the view that it prioritises administration cadre officials over those from the tax and customs cadres for top positions.