Bangladesh Splits Tax Authority Under IMF-Backed Reform

Bangladesh’s interim government has dissolved the National Board of Revenue (NBR) and replaced it with two new divisions under the finance ministry, aiming to modernise tax administration and strengthen revenue collection.

The overhaul, formalised through an ordinance issued last night, fulfils a key requirement of the International Monetary Fund, which has long pressed for the separation of tax policy and administration to help raise Bangladesh’s low tax-to-GDP ratio.

Under the newly enacted Revenue Policy and Revenue Management Ordinance 2025, the government will create a Revenue Policy Division to draft tax laws, set rates, and manage international tax treaties, and a Revenue Management Division to handle enforcement, audits, and compliance for income tax, VAT, and customs.

The restructuring comes amid mounting economic pressures, including falling foreign exchange reserves. The interim administration, led by Nobel laureate Muhammad Yunus, has championed the reform as a step toward better governance and efficiency. However, some revenue officials have criticised the move, saying the ordinance sidelines experienced tax and customs professionals from policymaking.