Revenue being the main stay of a government that enables it to invest in human capital, infrastructure and provide services to the citizens, it is imperative that the department that collets it is up to the job. So, the question is if the Bangladesh government's revenue earning wing, the National Board of Revenue (NBR), has yet come of age. Given its aging and inadequately-staffed setup, it is no wonder that the tax authority is increasingly finding it difficult to deliver particularly when the number of taxpayers in the country has increased manifold over the last one decade. The data available at the NBR, for example, show that as part of extending its tax-collecting network in 2011, some 31 income tax zones were created in the country to serve 1.1 million individual (income) taxpayers. Oddly though, the same tax machinery is at work even today, though, to go by the current Tax Identification Number (TIN) figure, the number of taxpayers has meanwhile increased to 8.0 million (as of April, 2022). Little has been done so far to widen the tax network to meet the present need.
So, it is indeed a miracle that the NBR is still able to look after with the same manpower it had a decade back the tax-files of individuals whose number has meanwhile increased around sevenfold. What is then holding back the NBR, or the government, for that matter, from expanding its present setup with the required manpower, infrastructure and logistics? It is important to note here that the NBR's present inadequacy is not limited to itself. It is in fact a national issue and an urgent one at that. The government has to address it with the seriousness it deserves.
Consider the present tax-to-Gross Domestic Product (GDP) ratio of the country, which, being below 8.0 per cent, is one of the lowest in the world. In the Bangladesh Perspective Plan 2020, for instance, the country's tax-GDP ratio was targeted at 16.01 per cent and to that end it required that the revenue collection grew by 18 per cent. What is at issue here is not just the number of people engaged to do the job of tax collection. It is also important that the quality of the manpower employed and the system under which they work are up to the mark. For it is no secret that complaints about harassment of the general taxpaying public at the hands of the taxmen, concealment of the real income of the wealthy taxpayers with the connivance of tax officials and other kinds of irregularities in the tax department abound. So, there is no gainsaying the fact that public trust, transparency and integrity in service delivery have hardly ever been the strong point of the existing tax regime.
It may be recalled that it is exactly against this backdrop that the World Bank (WB) some two decades back suggested digitization of the nation's tax system. For the automation of a major Value-Added Tax (VAT) project, it (WB) even provided a fund amounting to Tk 7.0 billion. Given the go-ahead in 2014, the progress so far made in project implementation leaves a great deal to be desired. One wonders if the NBR is serious about modernising its three wings-customs, VAT and Income Tax-through digitization. So, to overcome its limitations, the tax authority will be required to modernise its service delivery regime---one that can meet the nation's present need.
