The government is on the verge of a breakthrough in the national revenue system for the upcoming 2021-27 fiscal year. The proposal has come to abolish the current National Board of Revenue (NBR) and form two separate departments – 'Revenue Policy Department' and 'Revenue Management Department'. It is claimed that this will increase the ratio of taxes and GDPs, transparency and ensure accountability. But as the expectations surround the decision in the respective palaces, some are raising fears and controversy.
NBR
Bangladesh's tax-GDP ratio has been the lowest in South Asia for a long time. Currently it is below 5 percent. As a result, the government is unable to allocate adequate money to the development expenditure and social security sector due to revenue deficit. The World Bank and the International Monetary Fund (IMF) have repeatedly suggested that policy making and implementation should be separated. They argue that in the same institution, the formulation of policy, implementation and evaluation is a major obstacle to transparency and skills. In that context, the proposal for division of NBR has come.
The World Bank, the IMF and development partners have been suggested to separate policies and implementation for a long time. Even the reform is included as a prerequisite “under the $ 1 million loan agreement that signed with the IMF in 2022.
Recommended structure: What's the change?
A number of proposals have been made in the draft of the 'State Policy and Revenue Management Ordinance'. One of these is the abolition of the National Board of Revenue (NBR).
The proposal highlights the formation of two separate departments. Of these, the 'Revenue Policy Department' will formulate taxes, tariffs, VAT and revenue-related policies, determining the basis of budget preparation, setting tax rates and structures, incentive plans, etc. That is, the Revenue Policy Department will be in charge of formulating policies, tariff structures, incentives and budget plans.
And the 'Revenue Management Department' will basically work. Tax collection, prevention, taxpayer information collection, audit, tribunal, cases and field level activities will be conducted. Many experts call this structure a reflection of the modern administration.
The two departments will be headed by separate secretaries, who will also work directly under the Ministry of Finance. In addition, the current NBR's structure (chairman, members, departments) has been abolished by abolishing their responsibilities to two new departments.
Positive aspects
What are the potential benefits to the NBR division? Those concerned said that first it will bring transparency in policy making and implementation. If the organization's two types of work are different, the focus will increase on their work. Second, responsibility will increase. That is, if the revenue comes low, who is responsible – the policy or implementation? It will be clear.
At the same time, this step is expected to reduce corruption. They say administrative division will create check and balance at multiple levels. Above all, the confidence of international development partners will be gained. Such reforms are long -standing recommendations from the IMF and the World Bank. Implementation can make it easier for international debt and assistance.
Two
Specialist Snehashish Barua said, “If policy -making and implementation is different, transparency increases and ensures effectiveness.”
Former World Bank Chief Economist Dr. Zahid Hossain thinks, “It is not broken by the NBR, but the specific boundary between policies and implementation is drawn.”
According to him, the true separation would mean that the policy department would work independently from the Ministry of Finance, not under the NBR.
Revenue
Despite the various kinds of hope and hope, the revenue administration has already raised objections to this division. The reason behind the opposition is to say that this will be questioned with specialized skills and appointment.
The draft states that the post of secretary of the two departments can be appointed from any cadre. Experienced officials of the revenue cadre may be underestimated.
Former NBR member Farid Uddin told the Bangla Tribune, “The revenue administration is a specialized sector. It is difficult to make a decision to understand the real complexity by bringing outsiders. '
Second, dual authority and conflict are also being feared. It is said that the policy department will oversee the activities of the Department of Application (Implementation) – there are provisions in the draft that can create administrative duality. It can take the divisional tension and legal complications in the future.
Institutional memories and skills are also feared to reduce. NBR, founded in 12, is an effective and experienced organization. Many fear that the institutional memory, efficiency and technical structure of the tax administration will be destroyed by the breakdown of the tax administration.
Main conflict: skill vs. bureaucratic control
The proposal has kept the way to appoint any administrative cadre officer as a secretary, ignoring the skills and experience, which can mainly replace the skilled manpower of the revenue administration. Some have also feared implementation will be threatened if the field experience and policy making will be disconnected.
Legal and political debate
Part of analysts say some NBR powers are established on a constitutional basis. The abolition of NBR through the executive ordinance can arise legal questions. Moreover, if the policy department monitor the implementation department, the balance of power may be damaged, which will bring about administrative conflict.
Business
The business palace has long been demanding a separate policy and implementation unit. BKMEA President Mohammad Hatem said, “Those who form the policy, can cause conflict in interest if they apply.” However, the challenge of implementation is not less. At present, it is difficult to ensure the skills of the two departments without the rearrangement of the NBR IT, audit structure and experienced manpower.
Front
A special consulting committee formed in the context of the revenue administration reform has already submitted their final recommendations to the Ministry of Finance. In addition to the committee led by former NBR chairman Mohammad Abdul Majid, various cadre associations have given different opinions. The BCS (Customs and VAT) Association recently demanded amendment to the draft ordinance at a special general meeting.
On April 7, the draft of the ordinance was sent for legal vetting. According to the plan, it may begin implementation from July. NBR Chairman. Abdur Rahman Khanon told the Bangla Tribune, 'The beginning has to be done. Even if there is a debate, it will be resolved through implementation. ' But the question remains – will this transformation be a true structural reform, or will it lead to administrative conflicts, skills deficiencies and legal complexity?
It should be noted that the idea of ​​reconstruction of the revenue administration first came from the International Monetary Fund (IMF), in 1. Then the World Bank made similar recommendations during the caretaker government in the 21st.
In all, if this initiative is implemented, a long -awaited structural reform in the revenue policy and administration will become a reality. However, the experts warned that if this reform is taken forward by avoiding parliamentary discussions or ignoring the experienced views of stakeholders and administration, it will be limited only to the planning of paper – which will finally give the people.
