Revenue management at risk of coming under executive control: TIB

Transparency International Bangladesh (TIB) has expressed concern over the hasty issuance of the ordinance abolishing the National Board of Revenue (NBR) and creating two separate divisions for revenue policy and management.

In a press release, the anti-graft watchdog warned that the move risks placing revenue management under the control of the executive branch.

While the initiative was undertaken based on a rationale to separate revenue policy and revenue management to ensure policy independence, transparency, accountability, increase the tax-to-GDP ratio, and achieve revenue collection targets, it ultimately fails to allow the minimum degree of autonomy that revenue management should enjoy from the executive, TIB said.

The statement by TIB comes at a time when revenue officials have been observing a pen-down strike with a three-point demand, including repealing the new Revenue Policy and Revenue Management Ordinance, 2025, which seeks the dissolution of the NBR and the Internal Resources Division.

TIB Executive Director Iftekharuzzaman said there has been a longstanding demand to separate policy formulation and implementation in the revenue sector to establish transparency and accountability.

This is because keeping these two crucial functions within a single structure has often led to conflicts of interest, collusive corruption, bureaucratic delays, and failures in meeting revenue targets—placing the country in embarrassing situations both nationally and internationally.

The most recent advisory committee on revenue reform, along with various stakeholders and experts over time, has recommended decentralisation of revenue management.

"In this context, we want to consider the interim government's policy-level initiative positively. However, it raises serious questions as to why the ordinance was issued bypassing the recommendations of the advisory committee formed specifically for revenue reform," he said.

"In whose interest were these recommendations ignored during the formulation of the ordinance?" he questioned.

He added, "In the name of decentralising the revenue board, the ordinance has effectively turned it into an institution under the control of the government, particularly the Ministry of Finance."

TIB, citing international best practices, said a country's revenue policy and management should be handled by an independent agency, board, or authority with legal safeguards to ensure it remains free from political and administrative influence.

However, by disregarding the core recommendation of the advisory committee, the country's revenue system has now been transformed into two departments under the executive branch, it added.

"As a result, there remains ample scope for irregularities, including corruption and conflicts of interest, in the formulation and implementation of tax policies," according to the TIB press statement.

It is not unreasonable to assume that these risks may even increase.

To achieve the expected revenue targets and ensure transparency and accountability in revenue management, there is no alternative to placing the two newly formed departments beyond the reach of political and administrative influence through legal safeguards, it added.

"This decision by the government has already fuelled existing inter-cadre tensions—something that cannot be ignored."

Iftekharuzzaman said simply decentralising the revenue system will not automatically lead to the desired outcomes.

He noted that it is well known that irregularities and collusive fraud in revenue assessment and collection are among the major means of tax evasion in Bangladesh.

"Despite various initiatives over the years, we have seen that the processes of filing income tax returns and collecting VAT are yet to be fully digitised; harassment and corruption have not declined; invoice fraud remains unchecked; tax evasion and money laundering continue unabated."