Panic grips NBR officials

The relief that followed the end of a disruptive strike by tax officials at the National Board of Revenue has quickly given way to anxiety and regret, as the government started a clampdown on those involved. Just days after business leaders mediated a resolution, authorities have begun forcing senior officials into retirement and expanding corruption probes.

In a flurry of actions on Wednesday, the finance ministry ordered the retirement of four senior NBR officials, invoking a provision in the public service law that permits such removals "in the public interest". A day earlier, a commissioner from the Chattogram Customs House was suspended for his alleged role in the shutdown that brought port operations to a standstill.

In parallel, the Anti-Corruption Commission (ACC) yesterday launched investigations into five additional NBR officials over alleged corruption and irregularities, raising the total number of officials under the graft watchdog's scrutiny to 16. Most of those targeted are linked to the NBR Reform Unity Council, the platform behind the recent protests.

These measures follow two months of intense turmoil at the tax authority. NBR officials, protesting an IMF-backed ordinance to restructure the powerful revenue body and demanding the removal of NBR Chairman Abdur Rahman Khan, had enforced a shutdown of port and customs services on June 28-29. Their action stalled the port of Chattogram, the lifeblood of the nation's trade, a measure described by many as "extreme and unprecedented".

Alarmed by the economic haemorrhage, prominent business figures stepped in to mediate. They secured an agreement for the officials to return to work based on what they understood to be government assurances that there would be no reprisals.

But the government's swift steps have created a palpable sense of fear mixed with self-recrimination among protest leaders, with some officials privately conceding their strategy was a "failure of leadership". One senior official admitted they "rushed into the shutdown", which he said was a "tactical error that left them exposed".

"Everyone's now asking: what went wrong? Why did we go for a shutdown so quickly this time?" said the official who held a leadership role in the protest.

"Last time, the movement unfolded gradually. We kept the government informed every step of the way. But this time, it was different."

The official said a sense of "suffocation" now prevails as they struggle to understand why the government took "such an aggressive stance" instead of pursuing other disciplinary options. "No one knows who might be targeted next. The entire atmosphere has become deeply unsettling."

This internal crisis has practical consequences. The removal of seasoned officials has created what insiders describe as a "clear skills and leadership vacuum", raising concerns about the NBR's operational capacity at a critical time.

The episode highlights a tension in a vital area of Bangladesh's economy. The government is attempting to push through reforms to modernise revenue collection, but has met with fierce resistance from an influential bureaucratic cadre. Having faced down the protest, the government seems determined to reassert its authority. Yet, the heavy-handed approach came under criticism.

BUSINESS LEADERS EMBARRASSED

Prominent business leaders who mediated an end to the crippling strike at the national tax authority on June 29 have expressed "embarrassment" after the government's action against protesters.

Syed Nasim Manzur, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh, emphasised the longstanding demand of the business community for a clear separation between tax policy formulation and tax administration.

"This reform is essential," he said, noting that assurances of support for reform were received from the protesting officials. "It was on this basis that we engaged with them, with the aim of mediating a resolution to the ongoing crisis."

Referring to the work stoppage, he added, "When the shutdown occurred, we felt a moral responsibility to intervene, not only to support dialogue but also to safeguard the economy from further disruption."

He expressed appreciation for the successful outcome of their mediation efforts. "We were fortunate to be able to convince both the striking NBR officials and the finance adviser, along with the NBR chairman, that negotiation was the best path forward," he said.

Following the intervention and based on assurances from the finance adviser and the chairman that the government would adopt a sympathetic stance towards the officials involved, the work stoppage was brought to an end.

Manzur underscored the importance of integrity and competence in the reform process. "Such reform requires the involvement of capable and honest officials within the NBR. Indiscriminate targeting of NBR personnel will only hinder progress now. Therefore, we urge all stakeholders to avoid actions that could give rise to a new crisis."

He welcomed the government's initiative to form a committee to address these issues.

"We sincerely thank the government for establishing the committee. However, we respectfully urge that its primary objective be to facilitate a participatory and constructive dialogue, particularly with the honest and competent officials of the NBR in order to achieve and sustain meaningful reform."

The newly formed five-member advisory committee, led by Energy Adviser Muhammad Fouzul Kabir Khan, yesterday met with NBR officials, including representatives from the associations of BCS taxation and customs-VAT cadres. The NBR officials urged the government to adopt a more flexible stance on the protesters and halt the ongoing actions, according to senior NBR sources.

The committee asked NBR members and the associations to submit elaborate reform proposals concerning the ordinance within two weeks.

Ahsan Khan Chowdhury, chairman and CEO of PRAN-RFL Group, said they became involved when they faced difficulties in exporting goods. "Some 28 of our export trucks were stranded at Akhaura Land Port because of the shutdown," he said.

"We thought that they did not want the split of the NBR. But we came to know that things were not like that. We found that there was a gap between them and their bosses."

"We are used to resolving labour issues in our factories through discussion, and we thought a resolution was possible through discussion."

Chowdhury said that during a meeting with the finance adviser, they conveyed that the protesting officials were willing to return to work on the condition that they would not face harassment or disciplinary measures.

"If our shipment suffers, or we miss or delay a shipment, who will take the responsibility? So we urge the authorities to pardon them. Please create an environment for them to work, enable them to work, and let the country and economy operate smoothly," he said.

Kamran T Rahman, president of the Metropolitan Chamber of Commerce and Industry, said business leaders had urged tax officials from the outset to reconsider their course of action. "We told them clearly that this is not the right way. You can't hold the country hostage like this."

But he also expressed disappointment at the government's tough stance following what he described as a clear understanding between mediators and the finance adviser.

After the pen-down strike was called off, Rahman said, the government should have reciprocated by reopening talks. "I believe this hardline approach could have been avoided. It would have been far better to work toward a sustainable, year-long solution," he added. "There must be renewed dialogue with the government. We have to focus on protecting the country, preserving the economy, and keeping everything running."

Taskeen Ahmed, president of Dhaka Chamber of Commerce and Industry, described the situation as an "embarrassment" for the business community.

"We fully supported the government's reform agenda, which aligns with long-standing demands for honest, modern, and practical changes," he said. "Also, we strongly oppose the way NBR officials enforced a pen-down strike, effectively paralysing the entire economy. The government has lost more than Tk 5,000 crore."

Ahmed described the work stoppage as "unprofessional", and said business leaders stepped in only after customs operations across the country remained suspended for two straight days.

"We urged the authorities not to escalate the situation further and to handle it with sympathy, acknowledging that mistakes can happen on both sides," said Ahmed.

"We believe a softer approach would have been more effective than immediate punitive action. Hardline measures help no one -- these issues should be resolved through dialogue. Frankly, we're quite embarrassed by how things unfolded," he said. "We will try to re-establish communication with the government, because we don't understand what changed."

Tapan Chowdhury, managing director of the country's largest drugmaker Square Pharmaceuticals, described the measures taken by the authorities after the withdrawal of the shutdown as "unfortunate". 

He said the protesting officials withdrew the strike after listening to the business leaders, but they were very scared about possible punitive steps.

"We told them we would take care of the matter and asked them not to worry. We said nothing would happen if they behaved properly," he said.

"It's [what has happened later] a shame for us. We have lost our face. I don't think that anyone will listen to us in future," Chowdhury said. "It's not that we are supporting them [protesters]. We are saying this for the greater national interest."

Fazlee Shamim Ehsan, executive president of the Bangladesh Knitwear Manufacturers and Exporters Association, said the NBR chairman talked about forgetting the past and moving forward after the withdrawal of the shutdown.

Taking punitive measures after making such a commitment is actually destroying trust and putting the business community in an embarrassing situation, he said.

The NBR will lose dynamism as a technical organisation if the officials' morale is broken, Ehsan said.

Mahmud Hasan Khan, president of the Bangladesh Garment Manufacturers and Exporters Association, also said work speed will be slow at the NBR if the panicky situation prevails and the officials' morale is down. "This is concerning for us," he said.