NBR plunges into turmoil

The crisis at the National Board of Revenue is deepening as disgruntled employees have launched a fresh five-day protest, demanding the chairman's removal and the repeal of a new ordinance that splits the tax authority. The protest threatens to disrupt tax collection, delay trade and further strain the country's revenue targets.

The demonstrations resumed yesterday after a one-day pause for negotiations between interim government advisers and the aggrieved officials, who argue that the new ordinance undermines their benefits.

Customs clearance and business operations have been hampered due to the protests that continued for five days before the failed negotiations, exacerbating concerns over the NBR's ability to meet its fiscal year targets amid already sluggish revenue growth.

In a press briefing at the NBR headquarters yesterday, the NBR Reform Unity Council vowed not to cooperate with NBR Chairman Abdur Rahman Khan at work.

"From the outset, it was clear to us that the NBR chairman failed to provide accurate information to the government's policymakers about the scope and rationale of our lawful movement. Instead, he concealed the truth, leading to the current situation," said Shahadat Jamil, a protest leader and deputy commissioner of NBR.

The platform of tax, customs, and VAT officials and employees said they will submit a memorandum to the chief adviser, followed by sit-in demonstrations at NBR offices across the country today.

However, export-related functions and international passenger services will remain unaffected, the protesters said in a statement.

The group further threatened complete work abstention in all tax, customs, and VAT offices, excluding Customs Houses and Land Customs Stations, on May 24-25. A full work stoppage will begin on May 26 across all relevant offices.

The protest casts a shadow over the NBR's revenue goals. In the first 10 months of the current fiscal year, the tax authority collected Tk 2.85 lakh crore, reflecting a modest year-on-year growth of nearly 3 percent, according to provisional data.

The government has lowered its revenue target for fiscal 2024-25 by Tk 18,500 crore to Tk 463,500 crore. With Tk 178,500 crore still to be collected as of April, the ongoing unrest poses a clear risk to meeting that goal.

WHY NBR EMPLOYEES PROTESTING?

The protests were triggered by a midnight ordinance issued on May 12 by the interim government, which dissolved the NBR and the Internal Resources Division and created two separate divisions -- one for tax policy and the other for revenue collection.

While the government argues that the structural overhaul is aimed at preventing conflicts of interest between policymaking and implementation, revenue officials claim that provisions of the ordinance are discriminatory.

Their principal grievance lies in a clause that allows civil servants from the general administration cadre to lead the two new divisions, sidelining experienced officers from the revenue cadre.

Protesters say they are not opposed to the separation itself, but demand clarity and fairness in the appointment process, particularly in ensuring that seasoned professionals from the revenue sector are included in key policy roles.

The ordinance states that a "suitably qualified" individual will head the policy division, but does not mandate prior experience in the revenue sector, a key point of contention.

The aggrieved employees grouped under the banner of the NBR Reform Unity Council and initially issued a three-point demand: repeal of the ordinance, public disclosure of the NBR reform committee's final report, and a commitment to inclusive, consultative, and sustainable reform.

Following an initial five-day pen-down strike, the government invited the protesters to dialogue. A meeting on Tuesday involving three government advisers, including Finance Adviser Salehuddin Ahmed, was described by the government as "fruitful."

But the protesters disputed that claim, saying the discussion was inconclusive and failed to provide any concrete assurances, prompting the escalation of protests.

"We expected the advisers to take into account the NBR reform committee's concerns that the ordinance does not reflect the reform outline in its interim report," said Hasina Akter, an additional commissioner of the NBR.

"It's regrettable that advisers backed the ordinance, calling it a good one. They did not address which approach would be correct, align with international standards, or be best for the country," she said.

Hasina Akter also alleged that the finance adviser refused to hold further discussions on the matter. Salehuddin could not be reached over the phone for comments on this matter.

Business leaders have expressed alarm at the ongoing deadlock. Taskeen Ahmed, president of the Dhaka Chamber of Commerce and Industry (DCCI), said the chamber has long supported the separation of policy and implementation functions within the revenue administration.

"But the current instability, protests, and visible breakdown in cooperating with the chairman are deeply concerning," he said. "This could harm not just revenue collection, but also the broader business and investment environment. We urge the government to act swiftly and inclusively to resolve the crisis."

Zaved Akhtar, president of the Foreign Investors' Chamber of Commerce and Industry (FICCI), echoed the need for reform. "This restructuring could deliver a more effective tax policy framework, but it must be implemented in the right spirit. Accountability should not be lost in transition," he said.

A top executive of a large commodity importing group said the impasse was already delaying tariff assessments and customs clearance, disrupting supply chains.

Ashraf Ahmed, former DCCI president, warned that unless the policy unit is aligned with growth objectives, the reforms may prove ineffective. "We need tax reforms that support investment -- for instance, the removal of stamp duties on bonds helped create a bond market," he said. "Administrative disputes have little bearing on taxpayers or the broader economy."

NBR Chairman Abdur Rahman did not respond to requests for comments over the phone.

CALLS FOR A SOLUTION

"Resolving this situation is essential. We're already witnessing its impact on revenue collection, and if it escalates further, the consequences could be serious," said Muhammad Abdur Razzaque, chairman of the Research and Policy Integration for Development (RAPID).

Razzaque said the unrest, if handled wisely, could serve as a turning point for genuine reform. "If the government realigns the structure and addresses all stakeholders' concerns, it could lead to a stronger, more functional NBR," he said.

He added that the tax authority should be developed into a career-based institution that promotes professionalism. "But that requires institutional thinking -- not disruption in the name of reform," Razzaque said.

Iftekharuzzaman, executive director of Transparency International, Bangladesh, recommended an "independent strategic" review that should incorporate the NBR reform committee's report and draw on lessons from international best practices.

More importantly, it should address the sources of deep-rooted internal resistance that, over the years, have turned the NBR into a haven for tax evaders and money launderers, while creating a hostile environment for honest taxpayers, he said.

Towfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue, criticised the lack of transparency in the reform process. "This shouldn't be seen as a turf war between civil service groups," he said.

"The previous regime's poor record of transparency and accountability should not be repeated by the interim government."

He stressed that reforms of such magnitude, legal and institutional, require consultations with stakeholders across the political, business, and expert communities. "The last major attempt in 2008 failed due to a lack of political consensus. This one must succeed."