Revenue management at risk of executive control: TIB

The 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 revenue management, warning that this move risks placing the revenue management under the control of the executive branch. 

In a statement today (17 May), the anti-corruption watchdog said that while the initiative was undertaken based on a logical rationale to separate revenue policy and revenue management in order 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. 

The TIB further observed that the government's decision to bypass the recommendations of the advisory committee formed for NBR reform and to issue the ordinance in haste has raised numerous questions. 

To uphold the core objective of revenue system reform, the TIB has called for immediate and appropriate amendments to the ordinance.

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. 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 to revenue reform, along with various stakeholders and experts over time, has recommended decentralisation of the 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. 

"In whose interest were these recommendations ignored during the formulation of the ordinance? If the decentralisation initiative is meant to establish transparency and accountability in the revenue system, is the process itself transparent - this is a question not without a merit! Furthermore, how much objective, knowledge-based analysis has been undertaken to assess whether this arbitrary change will indeed achieve the core objective of increased revenue collection?"

Zaman further said, "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. According to international best practices, 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, disregarding the core recommendation of the advisory committee, the country's revenue system has now been transformed into two departments under the executive branch. As a result, there remains ample scope for irregularities, including corruption and conflicts of interest, in the formulation and implementation of tax policies. 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. This decision by the government has already fueled existing inter-cadre tensions—something that cannot be ignored."

Emphasising that simply decentralising the revenue system will not automatically lead to the desired outcomes, the TIB executive director said, "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. The tax-to-GDP ratio has not increased—in fact, it has declined over the past decade. 

"Amidst all this, through the Public Audit Ordinance 2025, the government has stripped the Comptroller and Auditor General (CAG) of the authority to audit revenue assessment, creating unchecked opportunities for irregularities to go unaccounted for. Even amid these changes, a vested interest group within the bureaucracy resisting reform has once again institutionalised control under the guise of separating policy and administration. 

"Just passing an ordinance or creating separate departments for policy formulation and implementation will not yield the expected outcomes. Alongside keeping the revenue departments outside the control of the executive branch, it is essential to uphold ethical standards among personnel in revenue administration, promote automation, and actively focus on direct tax collection."

The TIB has called for the immediate suspension of the ordinance and urged for its comprehensive reformation through an independent assessment of its potential and risks, involving experts and stakeholders.