Introduction to Bangladesh Customs

Mohammad Akbar Hossain

Commissioner, NBR
akbar762003@yahoo.com
 Outline
• Introduction
• History
• Types of duties and taxes
• Administrative Arrangement
• Legislative process/apparatus
• Process of SRO formulation
• Appeal procedure
• National Budget Preparation
 Introduction

• Self introduction- lecturer and participants

• What is your expectation from this class?

 History
• Kautilya’s Arthoshastra: Taxation, Customs duty
collection, Tariff, and punishment. According to
Kautilya, last 3000 years, it is being collected in
different forms; French Revolution; Palmira,
• Central Board of Excise and Customs established in
1855
• The Sea Customs Act, 1878
• The Land Customs Act 1924
• The Excise and Salt Act, 1944
• The Customs Act, 1969
 History…

Toll-House: Chandragupta 321 to 297 B.C

Chungi-ghar: Mogul Period

Custom House: Since 1874 British to present

Tax Types
Tax
Direct Indirect
tax tax

Customs duty, regulatory

Income Tax duty, Supplementary Duty
(SD), VAT
 Direct Tax vs Indirect tax
Direct tax: Progressive and cannot be shifted onto
others- brings stability and reduce inflationary
pressure as they take away excess purchasing
power
Indirect tax- tax burden can be shifted- regressive-
makes distribution of taxes more unequal-more
inflationary in nature
Administrative Arrangements

Ministry of Finance

Banking and
Economic
Finance Division Financial Internal Resources
Relations Division
(FD) Institutions Division (IRD)
(ERD)
Division (B F ID)

National Board of
Revenue (NBR)
Customs Administration

NBR

Income
Customs VAT
Tax
BCS (Customs Income
& VAT cadre) tax cadre
 Administrative Positions at NBR

Chairman NBR

Customs wing VAT wing Members Income tax wing Member

Members (3 members ) ( 3 Members) Members (Board Admn)
(5/6)

• NBR consists of all these members

• Secretary IRD (NBR chairman) is the Chairman of the Board
 Customs Administration
Bangladesh Customs

Customs Valuation Customs Intelligence Customs Bond Office Customs Houses

Customs, Excise and VAT Commissionerate

Land Customs Stations

Airport Airfreight EPZ Foreign post CFS/private ICD Courier

 Legal Apparatus
• Constitution
• Act/Law (E.g. Customs Act 1969, VAT
Act 1991)
• Rules (E.g. VAT Rules)
• Statutory Regulatory Orders (SRO)
• Orders
• Circular
 Legislative Process
• Law is passed by the people’s representatives
in the parliament
• Bill is placed before parliament- when
it is passed
by the Parliament and assented by the Honorable
President, then it becomes a law
• The Customs Act 1969
• New Customs Bill is tabled in the parliament
• Each year, necessary changes are brought
through FINANCE Act in the budget session
 Process of SRO Formulation
• Summary prepared by the NBR and sent to the
Minister
• Approval of the Summary by the minister
• Draft SRO formulated by the NBR
• Vetting of the draft SRO by the Ministry of Law,
Justice and Parliamentary Affairs
• After approval/vetting of the Law ministry, SRO is
sent to BG press for printing and gazette
notification
 SRO formulation…

• When the matter is urgent, e.g. reduction

of duties on rice/essentials, decisions are
top-down
• SRO is approved in one go (summary and
SRO are not done in two phases)
• Then SRO is vetted by Ministry of Law and
issued (in a day or in few hours even)
 Appeal Procedures

• Appeal Commissionerates [headed by commissioner (appeal)]

[If the decision is given by Additional Commissioner and below]

• Customs, Excise & VAT Appellate Tribunal (headed by the

President of the Tribunal)
[If the decision is given by the Commissioner of Customs]

• High Court Division of the Supreme Court of Bangladesh

• Appellate Division of the Supreme Court

 NBR and National Budget
• Revenue budget (estimated tax revenue) prepared by NBR
• We will not discuss expenditure budget-that is beyond the scope of this course.
• NBR finalize the revenue budget proposals under the direct supervision of the Finance
Minister (FM)
• Then the FM takes the proposal to the Cabinet as per Constitutional obligation
• The Finance Minister briefs the Cabinet on the budget proposals before presenting it
to the Parliament
• Discussion at the cabinet - approved by Cabinet
• Prime Minister’s approval
• Honorable President approves the Finance Bill to place in the Parliament
• Finance Minister deliver budget speech and table the Finance Bill
• Parliament discuss the bill and finally pass the bill
• After the approval of the honorable president the bill published as the Finiace Act.
Questions and Comments
Thank you for your assistance