White Paper committee proposed NBR split but govt did it in haste without proper consultation: Debapriya

The white paper committee on Bangladesh economy had proposed to split taxation authority into policy and management but the government did it in haste without consulting the stakeholders, said Debapriya Bhattacharya, a distinguished fellow at the Centre for Policy Dialogue (CPD), today (19 May).

Debapriya, who was the chief of the white paper committee, said the recent move by the government to dissolve the National Board of Revenue (NBR) and split it into two parts minimised the scope of work of NBR employees. 

He made the statement during a forum titled "Bangladesh Economy 2025-26: Policy reforms and national budget" held at Lakeshore Hotel, Dhaka and organised by the Citizen's Platform for SDGs, Bangladesh, with Secretariat at CPD.

"Interest payments and subsidies will consume 75% of government revenue. A large portion of the remainder will be spent on public sector salaries.

"As a result, the government will need to rely on both domestic and foreign borrowing to implement its development budget. Overall, we are not observing any structural shift in budget allocations," said Debapriya.

He pointed to inefficiencies in social security spending, stating, "Only 30% of social security funds directly reach the poor, while the remaining 70% do not benefit them.

"At the same time, food sales through trucks — targeted at the urban middle class — have increased by 7%, while the rural food-for-work programme has been reduced by 40%. This is contributing to growing inequality."

Referring to recent economic trends, he said, "According to a World Bank report, the number of poor and extremely poor people is rising in Bangladesh. Youth unemployment is also increasing.

"Meanwhile, workers' wage growth is lagging behind inflation, meaning their real income is declining. Indirect taxes are rising faster than direct taxes, which puts additional pressure on general consumers."

Debapriya noted that the country's growth is not accelerating significantly and that long-standing budgetary issues remain unaddressed.

"We are also not seeing any organic link between the national budget and reform agendas," he said.

Citing findings from the white paper, he added, "We identified a kleptocratic structure formed by bureaucrats, certain business figures, and politicians. Among them, bureaucrats remain particularly active."

He expressed concern that economic reforms are not being prioritised. "There is far less political attention given to economic reform compared to other areas, and this lack of focus is undermining progress in other sectors as well," he said.

"We are not seeing meaningful discussion on reforms, nor proper coordination within the government. Transparency is also lacking. This is not how things should operate."

On investment prospects, he said, "The current components of investment do not provide much confidence. It is difficult to say with certainty that the economy is heading in a positive direction. The tax-to-GDP ratio remains below 10% and will likely stay that way in the next fiscal year."

Commenting on inflation, he said, "We have yet to see the effects of monetary policy in curbing inflation. Much of the decline has come from supply-side improvements and a stabilised exchange rate."