The National Board of Revenue (NBR) reform committee said NBR should not both formulate policies and collect revenue, rather a separate, independent and specialized policy wing should be formed.
The committee argues that this will free taxpayers from harassment due to biased decisions and revenue collection will increase.
The businessmen responded to the recommendation positively while economists fears of long-term deadlock in the sector.
NBR provides the largest part of government expenditure. It collects VAT [Value Added Tax], taxes and customs duties directly from the common people and businessmen.
Currently, the NBR is an agency under the Internal Resources Division (IRD). The agency simultaneously formulates revenue policy and collects revenue. And the Secretary of the IRD performs the duties of the Chairman of the NBR. However, the NBR Reform Committee recommended that the work of the NBR should solely be revenue collection.
Dr Muhammad Abdul Mazid, former NBR chairman and reform committee member, said: “Who will be the chair of NBR, will solely work on it rather issuing SRO [Statutory Regulatory Order]. Separate body will take care of SROs.”
On the other hand, the power to make policies related to VAT and tax will be in the hands of a separate revenue policy department which will be headed by a secretary rank officer.
In addition, there will be a permanent advisory council of 15 to 16 members including representatives of the NBR, finance, commerce, industry and related ministries, business organizations, and research institutions. All policies made by the commission must be approved by that committee. Later, the NBR will implement them at the field level.
The former NBR chairman believes that if the stakeholders included in the council, the distance between the government and the stakeholder will decrease.
Businessmen said that they wanted this kind of separation since long. Dhaka Chamber of Commerce and Industry (DCCI) President Taskeen Ahmed said that the separation should have happened earlier.
Although the initiative is initially seen as positive, economists are also concerned about the future. Economist and member of the white paper drafting committee Dr Zahid Hussain said: “No one disagree with the need for such separation.”
If the “separate policy making council” is formed within the administration, then no change will come, he furthered.
Translated by Afsar Munna
