In a late-night move on May 12, the government issued an ordinance dissolving the National Board of Revenue (NBR) and replacing it with two new divisions under the finance ministry: Revenue Policy and Revenue Administration.

The ordinance, aimed at modernising tax administration and enhancing revenue collection, was signed by Law Ministry Secretary Hafiz Ahmed Chowdhury and approved by President Mohammed Shahabuddin.

The change aligned with a key condition set by the International Monetary Fund (IMF), which called for a separation of tax policy from tax administration.

The draft of the Revenue Policy and Revenue Management Ordinance, 2025 was approved by the Advisory Council on 17 April.

Since then, NBR officials and staff from various tiers—including the Income Tax and Customs departments—had been staging protests, demanding the withdrawal of the proposed reforms.

They had also submitted seven key recommendations through their respective associations.

Under the new framework, the Revenue Policy division would be responsible for formulating tax laws, determining rates and managing international tax treaties.

The Revenue Administration division would oversee the enforcement of tax laws, conduct audits and ensure compliance for income tax, VAT, and customs.

In response to the ordinance, a new coalition—the NBR Reform Unity Council—was formed on May 12.

This alliance includes officers from the BCS Income Tax and Customs cadres, as well as non-cadre officials and lower-grade employees from both departments.

The group held a nearly nine-hour-long meeting and announced a sit-in protest scheduled for May 13.