e-TDS receiving less response

Despite the fact that fully automated electronic tax deducted at source (e-TDS) helps reduce hassles of taxpayers, around three lakh government and private entities across the country are still resorting to manual system.

Lack of promotional steps for the digital system and absence of proper trainings are among the reasons behind the potential users’ reluctance in adopting the method, say sector insiders.

However, the National Board of Revenue (NBR) officials said they had been working to digitalize the tax deposition system and want to take it forward as it is boosting up the revenue collection and able to curb tax evasion.

They said the unregistered entities pay source tax manually and most of them are fixing their withholding tax on their own.The NBR fails to audit the amount properly due to manpower shortage.

Officials estimated that source tax can be boosted to 85 percent from the current 60 percent if the entities register with the e-TDS as the tax evasion tendency will be easy to be traced through assessment and audit.

They believe that implementing online and automation systems could save cost and time for businesses as well.

At present, 4990 entities, mainly private companies, including banks, non-banking financial institutions and multi-national corporations are registered with the e-TDS system.

Till October 16 this year, NBR collected Tk790 crore since 06 October last year.

Of the money, around Tk178 crore was collected between July and October 16 in the FY23 and Tk612 crore in the FY22 through e-TDS. During the July-Sep period around Tk6, 414 crore was collected manually (through TDS).

The revenue board set a target to collect around Tk10, 000 crore through e-TDS in the ongoing FY 22-23.

NBR’s Tax Information and Management and Services Wing Member Mohammad Jahid Hasan told The Business Post, “The e-TDS is designed to avoid hassles customers face at the tax offices. It also ensures transparency and accountability.”

Currently, three lakh public and private entities are paying through TDS. Of them 1.2 lakh are government entities and 1.8 lakh private ones, he said.

“We collect around Tk1, 05,000 crore as income tax and of that 58 percent comes from withholding tax,” he said.

“TDS collection has gone up in the current fiscal year. It is 63 percent of the total income tax revenue,” he added.

The taxpayers pay through TDS at the source of 53 types of incomes including Sanchay Patra and bank account interests of depositors and source tax on export proceeds of exporters.

They have to deposit the money to the state coffer through banking channels and file returns with the field level tax offices, officials say.

The tax officials are trying to make e-TDS popular showcasing its usages, advantages at seminars, webinars and discussions with business communities and trade bodies to bridge the gap between tax authority and taxpayers.

But the promotional activities need to be boosted up further, he said.

Md Saiful Islam, the President of the Metropolitan Chamber of Commerce and Industry, praised NBR’s promotional activities. He said: “Implementation of online tax deposition and automation system could save cost and time for businesses.”

But it should be directed towards greater automation and cooperation improvement between government and the businesses, he added.

The system has been integrated with the government’s automated challan system (A-Challan) that is used for electronic payment of different government fees. There is also a refund facility in the system, tax officials said.

Centre for Policy Dialogue Research Director Khandaker Golam Moazzem stressed the digitalization of NBR. He said: “The NBR is yet to go for full automation which is required to make the tax collection easier.”

At the same time, the NBR has to pay attention to create new sources for revenue collection and strengthen the e-TDS and electronic fiscal devices (EFD) activities to ensure accountability in tax and VAT collection, he observed.