THE Bangladesh interim government recently made a pretty big decision — they are dissolving the National Board of Revenue and splitting it into two separate entities: the Revenue Policy Division and the Revenue Management Division. This change, laid out in the ‘Revenue Policy and Revenue Management Ordinance 2025,’ is aimed at tackling some of the ongoing inefficiencies in tax administration. And, it is something that international bodies like the International Monetary Fund have been suggesting for a while now. By separating how tax policies are created from how revenue is collected, the government thinks they can boost efficiency, cut down on conflicts of interest and expand the tax base.
Now, why are they doing this? Well, the idea is to modernise and professionalise the whole tax administration system. The Revenue Policy Division will handle drafting tax laws, managing treaties and setting the overall policy direction. On the flip side, the Revenue Management Division will take care of enforcement, audits, and compliance. This clear division of responsibilities should help minimise chances for internal collusion and enhance the integrity of the institutions. I mean, it makes sense — if the people writing the tax rules are not the same as those enforcing them, there is less room for issues, right?
Supporters of this reform are pretty optimistic. They believe that this setup could lead to more specialisation and better operational efficiency. Each division can really focus on what it is supposed to do, which ideally should lead to improvements in both policy design and enforcement. Plus, it could help distribute the tax burden more fairly by boosting direct tax collection, which could lessen the government’s reliance on indirect taxes that often hit lower-income folks the hardest. And hey, if the tax system is more streamlined and transparent, Bangladesh might just become a more appealing spot for both foreign and local investors, which is a win-win.
But, of course, it is not all smooth sailing. There has been some pushback from NBR officials who are worried that experienced tax and customs officers might get sidelined in this new structure. This concern goes deeper than just job security; there is a real worry about how personnel will be deployed and whether the whole thing might lead to more fragmentation. Critics are pointing out that, while the theory behind the reform sounds good, it’s all about how well it is put into practice. Without a solid transition plan and proper training for the staff, this split could lead to confusion, low morale and disruptions in the workflow.
And there is more — some people fear that instead of cutting down on bureaucracy, creating these two new divisions under the finance ministry might just lead to more layers of administration, higher costs and politicisation. If the transition is not managed carefully, we might see short-term hiccups in tax administration. As everything changes, businesses and taxpayers could find themselves in a bit of a fog regarding new processes, which could throw a wrench into compliance and revenue collection right when it’s needed most.
Still, despite these bumps in the road, the restructuring of the NBR is a unique chance to tackle some of the long-standing problems in Bangladesh’s tax system. If this reform is rolled out transparently, with the right resources and involvement from stakeholders, it could really set the stage for a more efficient, fair, and growth-oriented revenue system. The government now has to make sure the process is inclusive, using experienced personnel wisely to keep that valuable institutional knowledge while also welcoming new ideas. If they can pull this off, it could mark a real turning point in building a modern fiscal administration to support Bangladesh’s development goals.
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Md Mehedi Hasan works with a United Nations agency.
