Engage multi-stakeholders, political parties and ensure transparency

Separating tax policy from tax collection has long been recommended. This idea was strongly proposed in a recent white paper on the economy. About four months ago, the National Board of Revenue's (NBR) Advisory Committee, which is working on broader reforms for the NBR, submitted an interim report.

This was allegedly prompted by pressure from the International Monetary Fund, as the government wanted to act quickly rather than waiting for the complete reform recommendations.

The committee has reportedly engaged in discussions with stakeholders to prepare their recommendations on this separation. Current NBR staff also recognise the necessity of implementing this separation.

At the end of the day, the decision to dissolve the NBR and the Internal Resources Division into two new entities -- the Revenue Policy Division and the Revenue Management Division -- has sparked controversy, leading to the current debacle.

This situation should not simply be perceived as a power struggle among civil service factions. We must remember the objectives of this reform: to ensure the independence of tax policy from collection, thereby avoiding conflicts of interest, and to promote the government's economic goals beyond merely mobilising resources by upholding principles of tax justice. To achieve this, the proposed government tax policy agency should be professional and capable.

However, the process used to implement the reform is less than convincing.

We suffered for a long time under the ousted regime of the Awami League, during which certain segments captured policies that did not adhere to the principles of transparency and accountability. It is essential that any reform implemented during the interim government, in which we have high hopes, does not follow the same path.

Such a significant reform initiative, which involves both institutional and legal changes to a critical government agency responsible for a substantial portion of domestic resources, demands broader consultations with multiple stakeholders and must be conducted transparently.

Let us recall that a similar administrative approach was taken in 2008 by the then caretaker government, which did not succeed due to a lack of political buy-in. This reform attempt has to be successful.

The current situation is certainly an embarrassing one for the interim government. The "pen-down" action taken by NBR officials is undermining the government's efforts to revive the economy. A more effective strategy for moving forward should involve broader consultations conducted transparently, including all relevant government parties, the advisory committee, business leaders, experts, and political parties. Political groups will play a crucial role in advancing any reform process in the future.

It's important to remember that if we had a functioning parliament at this time, there would likely be opportunities to discuss these issues. The authorities must recognise that while the current interim government was not formed through an election, they are in power due to a mass uprising that underscores the need for democratic accountability.

This situation may also be symptomatic for (larger) future reforms as well. Surely, major political parties need to own this reform. In this spirit, I hope the issue will be positively resolved at the soonest.

The writer is a senior research fellow at the Centre for Policy Dialogue.