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“All Citizens are Equal before Law and are Entitled to Equal Protection of Law”-Article 27 of the Constitution of the People’s Republic of Bangladesh

Issue No: 132
August 22, 2009

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Post Office Act: Need for a reform

Md. Mostaque Hassan

COURIER service is highly essential and accepted by the cross section of people of Bangladesh. As per Post Office Act 1898, no private operator is allowed to deliver postal services. Disregard of this provision incurs monetary penalization. Under this Act, couriers are not allowed to operate business. That is why they have been delivering letters in the name of 'document'.

Government regulates postal services for the citizen through Post Office under the provisions of Post office Act 1898. This Act is more than a century year old and has failed to deliver quality service to meet the global standard. Due to ancient services of the post office, customers tend to dissatisfy by this department's services and are eager to use more service oriented courier services.

Introduction of courier service in Bangladesh
In Post Office Act 1898, there was no provision or even a Government rule/ regulation to operate Courier Service in Bangladesh. General booking, to pay booking, value declared booking were undertaken through Air Express Service of Biman under a 'Cargo Regulation' of the Government. Air Express Service of Biman was closed down in 30 October 1983. Following the procedures of the cargo regulation of Air Express Service, some Courier Services started the similar types of operations of 'to pay booking, general and Value Declared booking (VD booking) like Air Express Service of Biman. Due to increasing demand of the community, gradually this service expanded to all urban areas including some Upa-Zilas' of Bangladesh. Now Courier service has become essential and necessary for the citizen of Bangladesh. Till today there is no rule and regulations for operating courier services in Bangladesh. Considering the increasing demand of the Courier Service and persuasion of the Courier Service Association of Bangladesh (CSAB), NBR gave them a SO-28 Code through issuing a SRO-17 in 2000 to operate this business. In 2004, another SRO (SRO # 173) was issued fixing 15% VAT on its services. In 2007 another SRO (SRO # 130) was also issued and enlisted Currier Services as a 'service provider' and reduced VAT rate of its income from 15% to 4.5%.

Initiatives of amending section 4(1) and 58 of the Post Office Act'1898
(1) Presently, Courier Service Providers have been delivering a number of services in Bangladesh in different categories like-dispatch general/ valuable documents, deliver special services, remittance collection, parcel booking, and tie up with international Courier for handling documents to and from overseas countries and so on. The Couriers offer services mainly in urban areas, as urban areas are potential for Courier business. Most of the Couriers don't have rural coverage, as number of customers is very few. In some special cases, some big Courier Service providers deliver documents in rural areas but charges higher fees for those transmissions. Couriers don't operate business where they don't profit; because; they have to maintain office, pay staff salary and above all make profit as they invest money and time in this profession. The Courier Services employed more than 1, 00,000 people in this sector. Although this service is necessary and essential in the present reality but they don't have legal coverage. On the other hand, the Government has no regulatory role to monitor their services. That is why; Courier Service Association of Bangladesh (CSAB) and the customers have been demanding to the Government to bring this sector under legal framework. It will help Government to look after the affairs of Courier, monitor the quality of services, ensure transparency and accountability of its operation, fixing appropriate fees and so on.

(2) The issue of Courier Service was brought to the notice of the Regulatory Reforms Commission (RRC). Regulatory Reforms Commission analysed the matter in the meeting. As the services of the Courier is widely accepted all over Bangladesh and as it already has got SO code and paying VAT/ Tax as per Government instruction and employing more than 1,00,000 people; so, it is rational to bring them under legal framework and facilitate them to improve their services.

(3). Thus, the Regulatory Reforms Commission (RRC) took decision and requested Government to reform the Post Office Act' 1898 by amending section 4 (1) and 58. The RRC further suggested the Government to make provision in the Act to formulate 'Rules' to operate 'Courier Service' in Bangladesh. This Rule would help Government to monitor activities of Courier Service and protects customers' interest. In addition, Courier Service Operators would also have access to different facilities of the Government. Thus, this will allow Courier Service providers to operate their businesses in a legal way.

Why reform is needed
The Post Office Act'1898 is the legal basis for the Postal Department to deliver postal services in Bangladesh. Postal Department has the nation wide service coverage. It is a very cheap and affordable for all classes of people of the Country. The services of the Post Office are slow and primitive nature; which don't satisfy today's demand. Where as, courier delivers documents as per desire of the customers with a quick and efficient delivery; which makes the sector trustworthy to the stakeholders.

That is why; customers are run after 'Courier Service' to get efficient and quick delivery of documents although it is costly. That is why; number of Courier has been increased over the last few decades due to increasing demand of this service. At the same time, the number of employment is also being increased and that exceeds 1, 00,000 since its inception in 1983. Having no regulatory body or rules to fix fees to carry documents they have been charging fees with the decision of their association and that is slightly higher. Couriers have been doing their business by taking SO code from National Board of Revenue and trade license from the City Corporation/Municipality. It is quite usual that without having legal bindings, customers' interest might not be ensured and also might not have transparency and accountability on their services. In absence of regulatory body; they are not been penalized if are involved in unethical or illegal activities. Without reform of section 4(1) and 58 of Post Office Act'1898; Courier Services are not to be brought under legal framework or regulated.

* After Close down of Air Express Service of Biman in 30 October' 1983, some potential private entrepreneurs started Courier Service as a business profession. But these services of the Couriers are to be given legal back up, as this sector has been contributed in the economy. Thus the section 4(1) and 58 of the Post Office Act'1898 is to be amended.
* Couriers and Couriers' Services are to be defined. Categorizes of services, finalize of service jurisdiction, fixing fees, maintain safety and security are to be mentioned in the definition.
* If commission or rebate for single or bulk booking is fixed and disclosed earlier then the business secrecy and techniques would also be disclosed. In that case business environment would be totally damaged and most of the Couriers would be bound to close their business. So, this provision in draft rules is to be removed.
* To promote Courier Service; access to finance, tax-free import of scanners/vehicle/ equipments and other facilities are to be given to this sector. So that Courier can scan documents and identify explosive and contraband articles and their service delivery would further improved.
* Before reforming Post Office Act; an exposure visit can be arranged with the representatives of CSAB, Post Office, Ministry Post & Telecom, RRC and other relevant bodies to Asian & advanced countries.

Concluding remarks
Government exchequers a lot of money in the form of VAT/Tax from the courier services. That is why; Government should pay attention of this sector and their issues are to be considered during formulating rules. There is great hope that the Government has accepted the recommendation of Regulatory Reforms Commission and planned to amend the Post Office Act'1898. Government has to come up with positive actions to reform relevant sections of the Post Office Act and formulate 'Rules' for operating Courier Service.


Md. Mostaque Hassan is Director (Deputy Secretary), Regulatory Reforms Commission.


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