National Board of Revenue

National Board of Revenue (NBR) is the apex body for the revenue collection and management
on behalf of the government's Ministry of Finance. The revenue collected by the National Board
of Revenue is the principal source of domestic resources for the implementation of the national
budget. It is also the catalyst for scheming, planning and monitoring in achieving economic self-
reliance. It wields influence on industrialization, trade and commerce and investment climate of
the country.

Functions of NBR:

The roles, jurisdiction and main functions of the board of revenue include:

(1) Imposition, examination, monitoring and collection of direct and indirect taxes;

(2) Formulation of laws, rules, regulations on collection of direct and indirect taxes, and
providing clarifications and explanations regarding their application;

(3) monitoring and controlling the activities of organizations engaged in collecting import and
export duties, value added tax, supplementary duties, excise and income taxes in a knowledge-
based, just and customer-friendly environment;

(4) providing assistance in the formulation process of tax policy and laws, signing of general
cooperation agreements with international organizations and foreign countries, agreements on
grants and loans and tax-related agreements;

(5) Fixing the jurisdiction and conditions for waiver and exemption of direct and indirect taxes;

(6) Voluntary expansion of the coverage of tax-payers and revenue collection through motivation
campaigns, and conducting data collection and intelligence activities for proper fixation of taxes;

(7) Curbing tax evasion and smuggling, implementation of import-export policies, preservation
and flourishing of domestic industries and formulating official policies with the goal of attracting
foreign investments.

Problems faced by NBR

The NBR is faced with similar problems to those of Revenue authorities in other countries. The
main risk is that revenue is not assessed, collected or accounted for to the extent determined by
Government. Administration of taxes is exacerbated in Bangladesh by a lack of adequate
systems, particularly IT systems, and procedures as noted in paragraph 11 above. The main
problems could be classified as follows:

• a lack of identity of all persons or transactions subject to tax;

• identified taxpayers are not assessed – properly or correctly;

• sums assessed as due are not correctly recorded;

• sums recorded as due are not collected – promptly or at all; and

• Taxes unpaid are not followed up with due diligence.

Potentialities of NBR:

The Modernization Plan of the NBR is the result of a series of engagements that the
NBR has had with its rank and file and key stakeholders to address the problems outlined above.
It covers a period of five years and has well defined goals and sub-goals
u n d e r n i n e strategic areas.

1. Tax Policy Reforms

This covers a new Income Tax Act, a new VAT Act and Customs Tariff rationalization and
modernization of the Customs Act

2. Integrated Revenue Management Program – Business Process Reform

This component aims to streamline the business processes across the different taxes
for greater efficiency and better tax compliance. This component is closely
dependent on the automation process as well as the reform that re-organizes the NBR by
function and size

3. Integrated Revenue Management Program – Automation of the Tax Processes:

This component includes the automation of the different wings of the NBR. A key part of this is
the allotment of Taxpayer Identification Number (TIN) and Business Identification Number
(BIN) for income tax payers and VAT payers respectively.

4. Redefining the Status and Regulatory Power of the NBR

This work stream addresses the overarching administrative structure of the NBR.
This includes strengthening the Headquarters including autonomy of financial and
personnel management, modifying reporting lines for greater efficiency and the place of NBR
within the executive and its relation with the government.

5. Restructuring NBR according to Function and Size

This component looks at means to improve the efficiency of the tax administration
by organizing it to deal with taxpayers by size (The Large Taxpayer Unit, Medium
Taxpayer Unit and Small Taxpayer Unit). Efficiency could also be derived by
merging functions (such as tax collection, and filing of tax returns) across the different taxes.

6. Strategic Communication and Taxpayer Outreach, Education and Assistance

This part includes designing a comprehensive communication strategy for

t h e N B R , devising taxpayer education modules, supporting taxpayers through
direct face-to-face a s s i s t a n c e p r o v i d e d i n t a x p a y e r s e r v i c e c e n t e r s a n d
t h r o u g h c a l l c e n t e r s , a n d a We b interface that provides comprehensive support to
taxpayers.

7. Enforcement Improvement Program

This component focuses at efforts to improve tax compliance through better audits,
better investigation including combating international tax evasion, improving
collection of tax arrears and addressing taxpayer grievances through quick disposal of tax
appeals including alternative dispute resolution (ADR) mechanism.

8. Human Resources and Institutional Development Program

This component looks at the various resources to successfully manage the implementation o f
the Modernization Plan. It includes human resources (HR) management
s u c h a s performance management, developing a research wing within the NBR and upgrading
the training infrastructure including the two tax training institutions.

9. Infrastructure Development Program

This component looks at the requirement of the physical infrastructure such as building and
furniture as well as the IT hardware requirements to support the automation of the
tax processes.

Authorities of NBR:

The NBR is constituted with 1 chairman and 8 members, including 4 for direct tax and 4 for
indirect tax. The secretary of internal resources division is the ex-officio chairman of NBR. The
status of members is equivalent to that of additional secretary. The total number of
departments/directorates under the NBR is 45. Offices related to direct tax total 25; of these,
those involved in collection of direct taxes number 18. The remaining offices include 5 involved
in the appeal process, 1 training academy, 1 engaged in inspection and 1 in survey work. The
number of offices involved in collection of indirect taxes total 20. Of these, 14 are engaged in
collection of indirect tax revenue. The remaining offices include 1 involved in the appeal
process, 1 engaged in intelligence and investigation work, 1 in inspection, 1 in tax exemption and
refund, 1 training institute and 1 engaged in valuation of commodities.

The offices under the customs wing of the NBR imposes duties on all import and export
commodities of the country, applies relevant laws and regulations, determines processes, and
monitors and implements those. Although collection of revenue is the main responsibility, these
offices are also involved in trade liberalization and facilitation including application of various
legal provisions. These activities are carried out through 4 customs houses, 1 bond
commissionerate, 1 customs-intelligence and investigation department, 1 duty valuation and
internal inspection commissionerate and 28 effective land customs stations at various places of
the country. On the other hand, there are 2 departments, 8 VAT commissionerates, and 30
departmental and 112 circle offices under the Value Added Tax (VAT) wing. The areas of work of
the VAT wing include establishment of a modern, tax-payer friendly, accountable and dynamic
revenue administration, enhancing revenue from domestic sources and playing an effective role
in industrialization and expansion of trade and commerce. There are 18 tax regions, 5 appellate
tax regions and 2 departments under the direct tax or income tax wing of NBR. There are a total
of 303 circles under the 18 tax regions. The main responsibility of the income tax wing is to
contribute towards maintaining social balance by reducing income disparity and extending
assistance to industries and commerce by ensuring proper application of the income tax law.

Besides, the Central Intelligence Cell (CIC) works directly under the supervision of the chairman
of NBR. It collects information about tax-payers through intelligence work; gathers information
related to value added tax (VAT) and customs duties; undertakes data collection and investigation
on evasion of duties and taxes; analyses records of income tax payers; identifies tax evasion,
suppression of income and other crimes in accordance with the income tax law; undertakes
investigation on tax evasion, suppression of income, any other irregularities and fraudulence
related to income tax; gathers evidences-proofs, elicits fines and takes legal actions if required.
The research and statistics wing of NBR collects information related to revenue income from the
field offices and ensures their proper ordering, coordination and record keeping.

Diagram of NBR:

MOF

1. Finance Division 2. Banking Division 3. IRD 4.ERD

NBR
Administration Wing
Customs Wing
VAT Wing
Research & Statistics Wing
Income Tax Wing

Executive Judicial
Deputy DG CT (Appeal)
Joint DG AACT (Appeal)
Additional DG AYCT (Appeal)
CCT DG