A major reform is happening at the customs and tax administration with initiative being taken to create two separate revenue policy and revenue management departments by dissolving National Board of Revenue (NBR) and Internal Resources Department (IRD). An ordinance was issued on this matter on Monday night.

According to the Revenue Policy and Revenue Management 2025, the revenue policy department will determine taxes and duties and the revenue management department will collect those, and both departments will work under the finance ministry.

Meanwhile, dissatisfaction grew among the officials and employees of the customs, VAT, and income tax departments over the government’s initiative to dissolve the NBR. The NBR Sangskar Okya Parishad (NBR Reform Unity Council), a platform of customs and tax officials and employees, on Tuesday announced a three-to five-hour pen-down programme for the next three working days (Wednesday, Thursday, and Sunday).

Economists, however, welcomed this major reform initiative in the revenue sector. They think this reform will modernise tax administration, increase revenue, and make management more efficient.

Former NBR officials opined this reform might increase the dominance of the administration cadre in the revenue sector and curtail the opportunities of the customs and tax officials.

Until now, NBR had simultaneously been formulating revenue policy and collecting customs and taxes. However, businesspeople and economists have long saying that complexities mar the tax system because of performing both responsibilities of tax policy formulation and tax collection by the same agency. Businesses and taxpayers were facing various forms of harassments. So, businesspeople and economists have long been demanding the separation of revenue policy and revenue collection activities.