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Experts on Monday called for establishing a stable tax policy as they criticised the National Board of Revenue for its lack of accountability in deciding why taxes are exempted, increased or reduced.

They said that fiscal discipline must be fixed before addressing flaws in the tax system.

Speaking at a roundtable discussion on ‘NBR Reforms’ at the CA Bhaban in the capital Dhaka, they emphasised the importance of focusing on direct tax collection and forming a steady tax policy.

‘Foreign investors are discouraged by the absence of a consistent tax system,’ they noted.

M Masrur Reaz, economist and chief executive officer of Policy Exchange Bangladesh, highlighted a lack of transparency in the NBR’s tax policies.

‘The NBR doesn’t explain why it wants certain taxes,’ he said.

Masrur criticised the fiscal policy for being ‘dismantled’ to fund expensive mega-projects.

‘These high-cost projects need careful review. The pressure to finance them has shifted to the revenue board, creating undue stress to collect additional revenue. Until this pressure eases, sudden tax hikes will continue,’ he warned.

Masrur added that political pressure often forced the NBR into reactive decisions.

‘To fix the economy, fiscal policy must be corrected. We need discretionary authority, effective tax rates and predictability in tax changes,’ he said.

He also noted that the tax justice system in Bangladesh had been dismantled and must be restored immediately.

Tawfiqul Islam Khan, senior research fellow at the Centre for Policy Dialogue, questioned the rationale behind the NBR’s tax exemptions.

‘There’s no evidence or justification for these exemptions,’ he remarked.

Tawfiqul also criticised the weak digital infrastructure in the tax system.

‘We talk about creating a welfare state, but our taxation system does the opposite,’ he added.

Moinul Khan, chairman of the Bangladesh Trade and Tariff Commission, explained that revenue often increased when tax rates were reduced rather than raised.

‘In the past, we saw a 40 per cent rise in revenue after the tax rate for hotels and restaurants was lowered to 5 per cent,’ he said.

He underscored the importance of self-compliance over rate hikes, adding, ‘Increasing tax rates doesn’t always lead to higher revenue. Reducing rates can achieve the same goal more effectively.’

Nasiruddin Ahmed, a member of the advisory committee for NBR reforms, pointed out that alternate dispute resolution mechanism was prioritised in other countries but received little attention in Bangladesh.

He stated that the reform committee was working on actionable changes that could be implemented before the next government assumes office.

Aminur Rahman, another member of the NBR reform advisory committee, highlighted the country’s large grey economy.

‘If money laundering and the underground economy aren’t addressed, achieving desired revenue collection will remain impossible,’ he said.

Hafizur Rahman, administrator of the Federation of Bangladesh Chambers of Commerce and Industry, emphasised the need to increase the NBR’s efficiency to expand the tax net.

‘Expanding the tax net without improving efficiency will only make it harder to collect revenue from the existing system,’ he cautioned.

Abdul Mazid, another member of the advisory committee, said that the committee had already submitted an interim report to the government and promised to deliver the full report soon.

He added that the NBR should conduct at least one press conference per month to clarify the decisions it took.

The roundtable was attended by Economic Reporters Forum president Doulot Akter Mala, members of the Institute of Chartered Accountants of Bangladesh and other stakeholders.