The National Board of Revenue (NBR) has been grappling with delays in automating its bonded warehouse system, a long-anticipated reform aimed at boosting efficiency, curbing misuse, and enhancing revenue collection.
Despite taking several initiatives and setting multiple deadlines over the years, NBR’s progress toward full automation remains sluggish and incomplete.
“We are still struggling with the bond automation, we are yet to implement this fully,” NBR Chairman Md Abdur Rahman Khan told in a recent pre-budget meeting.
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In February 2022, then NBR Chairman Abu Hena Md Rahmatul Muneem announced plans to fully automate the bonded warehouse facility by 2023.
The objective was to prevent the abuse of the system, which had been a longstanding issue affecting revenue generation and industry competitiveness.
To achieve goal, the NBR initiated the National Single Window project in 2017, aiming to integrate 39 agencies involved in customs-related activities into a unified electronic system.
This system was designed to streamline procedures, reduce paperwork, and expedite trade operations.
Initially slated for completion by 2019, the project faced significant delays, with authorities aiming for a 2023 completion.
These setbacks raised concerns among stakeholders about the efficacy and timeliness of such automation efforts.
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One notable challenge in the automation drive has been resistance from stakeholders accustomed to manual processes.
For instance, in December 2021, the NBR mandated the use of specific software for diplomatic bonded warehouses dealing with liquor imports to monitor and prevent illegal market activities.
This move led to a strike by six private diplomatic bonded warehouses, resulting in a liquor shortage in the market.
The warehouses resisted the software implementation, citing operational challenges, which highlighted the difficulties in transitioning from entrenched manual systems to automated ones.
Moreover, the automation projects was hampered by external factors such as the COVID-19 pandemic, which disrupted timelines and resource allocations.
A lack of coordination among various agencies and occasional indecisiveness further impeded progress.
NBR officials said that inconsistencies and coordination lapses among agencies contribute to delays in implementing automation initiatives.
The business community, particularly exporters, has expressed concerns over delays and harassment in availing bond facilities.
In response, the NBR issued directives in November 2021 to expedite bond-related services, setting specific deadlines for processing applications and specifying required documents.
While these measures aimed to reduce delays and enhance transparency, their effectiveness at the field level remains a subject of debate among industry stakeholders.
In August 2024, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) met with the NBR to address ongoing issues related to customs and bonds.
The BGMEA emphasised the need for simplified and expedited customs services to maintain competitiveness, especially in the face of global economic challenges.
The NBR assured support and acknowledged the importance of creating a business-friendly environment to boost trade and investment.
As of February 2023, the NBR planned to extend bonded warehouse privileges to more export-oriented sectors, contingent upon the completion of the bond automation project.
Despite these efforts, the pace of automation has been slower than anticipated.
Projects like the National Single Window and customs bond system automation have faced repeated delays, raising concerns about Bangladesh’s position in global logistics and ease of doing business rankings.
The business community continues to advocate for expedited and transparent automation processes to enhance operational efficiency and competitiveness.
NBR Chairman Abdur Rahman Khan said his organisation is continuously trying to implement the bond automation.
“While the system will be user friendly completely, then we will roll it out for all,” he said.
While the NBR’s commitment to automating the bonded warehouse system is evident through various initiatives and projects, the journey has been fraught with challenges.
NBR officials mentioned that Overcoming resistance to change, ensuring inter-agency coordination, and adhering to project timelines are critical to achieving the desired outcomes.
“Successful automation is expected to not only streamline operations but also significantly reduce misuse, thereby enhancing revenue collection and supporting the growth of legitimate businesses in Bangladesh,” a senior NBR official told UNB over telephone.