Much-hyped bifurcation of the National Board of Revenue (NBR) is unlikely to complete during the tenure of the interim government as the major reform gets into legal and procedural labyrinth.
Officials and experts vent such despair in view of latest complications facing the major revenue reform.
Economists and governance specialists have stressed the need for legal clarity and cautious steps to frame the rules of business, organogram, and terms of reference to ensure a smooth transition of the NBR into two separate departments after 53 years.
The separation process has already taken a heavy toll on the country's revenue administration and earnings, too. Four senior tax, customs, and VAT officials were forced into retirement, while more than 35 officials suspended following protests against the bifurcation ordinance.
Executive Director of Transparency International Bangladesh Dr Iftekharuzzaman has said the revenue administration was facing an unprecedented situation surrounding the bifurcation, which is rare globally in revenue systems.
"The government attempted to separate the NBR on an ad-hoc basis without following due process or engaging internal stakeholders. This has eroded the confidence of corporate entities and individual taxpayers," he views.
While supporting the separation of revenue policy and revenue administration, he stresses that the policy wing should be an independent body, free from bureaucratic control.
"This government has no option but to leave the issue to the next political government," he feels.
Officials have said some officials of the administration cadre initially believed the separation would not benefit them after amendments to the ordinance reserved top positions for tax-and customs-cadre officials.
Meanwhile, officials from both cadres--tax and customs and administration--have pointed out that the process remains flawed, as it contradicts several constitutional provisions and may create serious implementation bottlenecks for tax policy.
Although the Rules of Business (RoB) and Allocation of Business (AoB) received in-principle approval from the National Implementation Committee for Administrative Reforms (NICAR) last week, final scrutiny by the Secretaries Committee remained stalled.
A scheduled meeting of the committee for Sunday was cancelled, following the suspension of another meeting last week.
"After the cancellation of Sunday's meeting, we are now confident that the remaining processes will not move forward in the coming days," says a senior government official.
Officials note that provisions of the Revenue Policy and Revenue Administration Ordinance 2025 directly contradict the basic structure of the Rules of Business 1996.
After NICAR approval, the RoB and AoB require scrutiny by the Secretaries Committee to ensure they do not conflict with existing frameworks. The documents must then receive approval from the Chief Adviser before draft gazette notifications are vetted by the law ministry, an official involved in the process said.
"It is unlikely that all these steps can be completed before the national election scheduled for February 12, 2026," he told the FE.
A legal expert, speaking anonymously, says several other rules, including the Cadre Composition Rules 1980, would need amendment for the NBR decoupling under the current model.
According to Article 55(6) of the Constitution, only the executive branch has the authority to form ministries or divisions. The legislative wing cannot create divisions or separate authorities through an ordinance, he says.
Under the Rules of Business 1996, a division is limited to policy formulation and work planning. However, the ordinance establishes a "Revenue Management Division" with enforcement authority, which contradicts both domestic and international administrative norms.
A former tax official warns that implementing the amended ordinance would require significant groundwork to prevent disruption to revenue mobilisation.
The original ordinance was issued on May 12, 2025.
Following protests at the NBR over provisions allowing non-revenue cadres to lead the policy wing, the government formed a five-member advisory committee headed by Energy and Road Transport Adviser Dr Foujul Kabir Khan.
The ordinance was later amended and reissued in September.
Earlier, the finance adviser had indicated that the bifurcation process would be completed by December.
Officials warn that the ordinance could backfire and further weaken revenue mobilisation if implemented hastily.
The tax-to-GDP ratio has already fallen to 6.6 per cent from 7.4 per cent in the previous fiscal year due to multiple disruptions, including shutdowns of tax, VAT, and customs offices during protests against the ordinance.
An earlier advisory committee on NBR reform was dissolved before submitting its report. A subsequent taskforce comprising economists, accounting professionals and other stakeholders has recently submitted its findings.
Under the ordinance, NBR officials would lead the Revenue Management wing, while the Revenue Policy wing would be open to officials with expertise in macroeconomics, trade policy, planning, and revenue-related issues.
The ordinance states that the policy wing would include officials experienced in income-tax policy, double taxation-avoidance agreements, international treaties, customs and VAT policy, and international trade agreements.
Other posts would be reserved for professionals with backgrounds in research and statistics, accounting and audit, ICT, and law.
Former NBR chairman Dr Abdul Mazid, a member of the dissolved reform committee, thinks the existing model is largely workable and capable of approval.
"Minor amendments can be made later if inconsistencies are identified by the next government," he says, adding that the ordinance allows private sector and stakeholder participation in revenue policy formulation.
He argues that the interim government should complete the bifurcation process during its tenure.
Economist Dr Masrur Reaz, Chairman of Policy Exchange Bangladesh, however, feels it would be prudent to leave the issue to an elected government.
He welcomes the government move to frame and pass the legal instrument but notes that the success of bifurcation depends not only on legislation but also on rules, procedures, institutional capacity, and skills mix.
"Proper groundwork is essential before institutionalising the two divisions," he suggests.
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