Separation of NBR tax policy dept from admn in the offing
Tuesday, 25 September 2007
Shakhawat Hossain
The government has started the process for separation of tax policy department from administration in the National Board of Revenue (NBR), official sources said.
The Ministry of Finance (MoF) decided to form a committee headed by a joint secretary to settle the issue at a meeting on September 9.
The move has been initiated as part of reforms of the NBR following a suggestion by the International Monetary Fund (IMF), sources added.
The meeting also assigned an additional secretary of the MoF to fix working criteria for the committee on separation of NBR tax policy from its administration.
As a follow-up measure, the committee was recently asked to submit a draft report suggesting structure, manpower and benefit of the new outfit of the NBR, said a senior MoF official.
The MoF official said the initiative reflects the seriousness of the caretaker government to bring reforms in the NBR.
The IMF has expressed dissatisfaction over delay in settling the issue after the government agreed in principle to go for separation of tax policy wing from administration last fiscal.
According to the Washington-based multilateral donor agency, critical issues, including separation of tax policy from administration, are needed for improvement in the growth of revenue generation.
Achieving future revenue objectives, beyond the modest increase forecast for the FY 08, will not be possible without a comprehensive reform in the NBR, it said.
The MoF official admitted that it became imperative for the government to carry out a comprehensive reform in the revenue board as there was no tax revenue growth, in real terms, during the last couple of fiscals.
According to a MoF study last fiscal, the annual tax revenue growth until 2004-05 fiscal was rather satisfactory.
But since the fiscal 2005-06 the situation has deteriorated as the NBR achieved 0.2 per cent growth in terms of tax-GDP ratio against the growth rate of 0.4 per cent.
But many NBR officials are opposing the idea saying that the change might not bring about a desired result.
"Many IMF recommendations, which were implemented in the past, could not bring much improvement in revenue generation," said a NBR member on condition of anonymity.
The official said many reforms were implemented in the revenue board during the last three fiscals by following the recommendations of the IMF and other donor agencies.
The government has started the process for separation of tax policy department from administration in the National Board of Revenue (NBR), official sources said.
The Ministry of Finance (MoF) decided to form a committee headed by a joint secretary to settle the issue at a meeting on September 9.
The move has been initiated as part of reforms of the NBR following a suggestion by the International Monetary Fund (IMF), sources added.
The meeting also assigned an additional secretary of the MoF to fix working criteria for the committee on separation of NBR tax policy from its administration.
As a follow-up measure, the committee was recently asked to submit a draft report suggesting structure, manpower and benefit of the new outfit of the NBR, said a senior MoF official.
The MoF official said the initiative reflects the seriousness of the caretaker government to bring reforms in the NBR.
The IMF has expressed dissatisfaction over delay in settling the issue after the government agreed in principle to go for separation of tax policy wing from administration last fiscal.
According to the Washington-based multilateral donor agency, critical issues, including separation of tax policy from administration, are needed for improvement in the growth of revenue generation.
Achieving future revenue objectives, beyond the modest increase forecast for the FY 08, will not be possible without a comprehensive reform in the NBR, it said.
The MoF official admitted that it became imperative for the government to carry out a comprehensive reform in the revenue board as there was no tax revenue growth, in real terms, during the last couple of fiscals.
According to a MoF study last fiscal, the annual tax revenue growth until 2004-05 fiscal was rather satisfactory.
But since the fiscal 2005-06 the situation has deteriorated as the NBR achieved 0.2 per cent growth in terms of tax-GDP ratio against the growth rate of 0.4 per cent.
But many NBR officials are opposing the idea saying that the change might not bring about a desired result.
"Many IMF recommendations, which were implemented in the past, could not bring much improvement in revenue generation," said a NBR member on condition of anonymity.
The official said many reforms were implemented in the revenue board during the last three fiscals by following the recommendations of the IMF and other donor agencies.