NBR reform imbroglio disrupts trade delivery, revenue collection

Entire revenue administration of Bangladesh faces an unprecedented disruption amid agitating-staff-government standoff over reform disagreements, threatening to upend the country's macroeconomic rebound process.

Finance officials, economists and businesses worry about immediate and long-term consequences of the deadlock as the two sides stayed locked in trading blames, misinformation and mutual accusations, while the revenue headquarters remained virtually besieged, tax offices across the country dysfunctional.

The turmoil comes at the fag-end of the upcoming fiscal year, starting July 1, 2025, leaving the revenue mobilisation far off the target.

What began as a protest has evolved into a nationwide agitation, with permanent work stoppages and tougher programmes being launched across the country in a cure-or-kill protest.

Speaking to The Financial Express, several officials from the National Board of Revenue (NBR) and its field offices said that the situation had started to calm down following the Eid vacation. However, a recent transfer order involving six protesting officials, combined with restrictions on using the NBR conference room for meetings and deploying law enforcers, reignited anger within the tax authority.

The deployment of law -enforcement agencies to "disperse peaceful protests further disappointed many officials, raising concerns about government's intention to resolve the issue amicably".

A senior revenue official says the situation has reached an "ego-driven stalemate," with both the Ministry of Finance and the protesting NBR officials blaming each other.

"Such agitation cannot be resolved by deploying law enforcers," the official warns.

Economists have expressed grave concern over the paralysis in tax and customs operations, while port activities remained nearly dysfunctional on Saturday, threatening the country's export earnings.

Professor Mustafizur Rahman, Distinguished Fellow at the Centre for Policy Dialogue (CPD), urges the government to act immediately to end the impasse.

"Business, trade, investment - the entire macroeconomy - will suffer long-term consequences," he forewarns, terming the matter a national priority.

"NBR is the nerve-centre of the economy, contributing nearly 90 per cent of revenue. Any blow to revenue mobilisation affects every aspect of the macroeconomic structure," he reminds, urging the government to reconsider the entire reform and separation process of the National Board of Revenue.

Dr Abu Eusuf, Executive Director of RAPID, emphasises the need for dialogue to a reach consensus.

"The situation is becoming increasingly complicated and needs to be cooled down urgently. Both sides must compromise on their rigid positions," he suggests.

Dr Masrur Reaz, Chairman of Policy Exchange Bangladesh, notes that the economy was on the brink of recovery, buoyed by export growth, currency stabilisation, rising remittances, an improved balance- of -payments situation, and foreign-exchange reserves.

"All of that progress could be derailed by continued volatility," he alerts.

"If work stoppages and port disruptions persist, the macroeconomic turnaround could be significantly delayed."

He also notes that domestic revenue will be crucial for restoring governance and managing the upcoming national-election process.

"The delay in resolving this issue is now affecting the economy, governance, and the preparedness for a democratic transition."

Dr Reaz also urges both parties to drop their egos and preconditions and return to the discussion table.

"As the chief and guardian of the economy, the finance adviser must sit with all stakeholders. This is not an insurmountable task," he says.

"No individual or group should be targeted - the national interest must come first."

doulotakter11@gmail.com