Govt eats crow – backtracks on implementing NBR split, for now

Highlights

• Ordinance dissolving NBR will be amended
• NBR will continue working in current form until ordinance is amended
• Amendments after discussions with NBR, all stakeholders
• Govt clarifies it has no plans to reduce positions or ranks of Customs and Tax cadres

Was it an unthinking decision made in the heat of a technocratic moment? That's the question swirling around the abrupt move to split the National Board of Revenue (NBR) into two wings – policy and management – on 12 May. The interim government's justification? Long-overdue reform. The execution? Hasty. The fallout? Predictable.

Today (22 May), the finance ministry issued a press release that essentially hit the pause button. Signed by Public Relations Officer Gazi Touhidul Islam, it said the NBR would continue to function under the existing system – for now. In the meantime, further amendments would be made to the "Revenue Policy and Revenue Management (2025)" ordinance.

What led to this debacle?

The opposition from within the NBR was loud and clear. Officials voiced their unease, particularly over who would helm the new divisions. Their fear – not unfounded – was that administrative cadre officers, with no prior experience in revenue administration, would parachute into leadership roles, bypassing seasoned tax officials who've climbed the hard rungs of the fiscal ladder. But those voices, echoing down the corridors of power, fell on deaf ears.

The finance adviser, displaying a kind of unwavering obstinacy dressed up as reformist zeal, declared publicly that the decision would not be reversed. After all, this was a move that had been "discussed since the 1990s" – as if the passage of time alone justifies implementation, regardless of readiness or context.

The press release, however, admits that implementing the split is a "time-consuming process" requiring more consultation and legislative tweaking. In other words, what was rushed through with bureaucratic bravado is now being walked back with the bureaucratic shrug of procedural delay.

More notably, the press notes assured NBR officials that their positions, ranks, and prospects would not be diminished – in fact, they might even see an expansion in promotions and secretary-level appointments after reforms are completed. A sweetener? Perhaps. A correction? Likely.

Yet several unresolved tasks remain: new organisational charts, redrafting of the Allocation of Business rules, and amendments to the Income Tax Act, Customs Act, and VAT Act – all vital to making the split operational. None of this, it appears, was ready at the time of the ordinance. It was reform by decree, not by design.

So, was it an unthinking decision? Or simply a premature one? Either way, the episode lays bare a familiar pattern in public policymaking – bold on paper, brittle in practice.

The ministry, in the press release, asked all officials to join work.

"In the larger interest of the state, at the last phase of the fiscal year, officers and employees of the National Board of Revenue engaged in national budget activities and revenue collection at all levels are requested to be present in the office during office hours, perform their respective responsibilities with dedication, and accelerate the country's economic activities by keeping revenue collection activities going and providing desired services to the respected taxpayers," it said.

NBR officials' reaction

A member of the NBR Reform Unity Parishad, a platform of the protesting NBR officials, said that the finance ministry's notice does not indicate that the demands of the protesting officials have been accepted.

Speaking to The Business Standard on condition of anonymity, the official, who holds the rank of additional commissioner, said, "The statement that necessary amendments to the ordinance will be made through discussions with stakeholders in order to formulate an administrative structure for separation while preserving the interests of NBR cadre officers – is a positive sign."

"But there is no clear mention of who will head the two separate divisions. Nor is there any mention of suspending or repealing the ordinance. Therefore, it cannot be said that our demands have been accepted."

Earlier today, a delegation of NBR officials, under the banner of the NBR Reform Unity Parishad, submitted a memorandum to the chief adviser demanding the repeal of the recently passed ordinance that separates NBR's policy and management functions.

The memorandum, handed over to Shabbir Ahmad, assistant private secretary to the chief adviser, by a five-member delegation including Additional Commissioners Sehela Siddiqua and Hasan Mohammad Tarek Rikabder,

They also called for the removal of the NBR chairman, the public release of the revenue reform committee's recommendations, and a comprehensive review of the reforms in consultation with stakeholders, including businesses, civil society, and political leaders.

Concerns over customs revenue target 

The revenue target for Chattogram Custom House in FY2024–25 is Tk80,402 crore. The target for the first 10 months is Tk70,631 crore, against which Tk 62,818.92 crore has been collected – falling short by Tk7,296.43 crore.

Stakeholders fear that if the ongoing crisis over NBR protests is not resolved, the country's main seaport and overall import-export trade may face a severe disruption.

However, after the six-day pen-down programme ended on 19 May, container deliveries significantly increased. From 20 May to 22 May, daily deliveries ranged from 4,000 to over 5,000 TEUs – up from 3,000-3,500 TEUs during the work-stoppage.