Economic Reporter :
The National Board of Revenue (NBR) has introduced major reforms in the source tax system, allowing agencies to deduct and deposit this tax in the government exchequer digitally.
Officials say the new system will reduce tax evasion and also increase tax realisation.
Comptroller and Auditor General of Bangladesh Mohammad Muslim Chowdhury inaugurated the electronic tax deducted at source (e-TDS) system – developed by a 21-member team of the NBR – at the NBR building in the capital’s Segunbagicha on Wednesday.
Senior Secretary of the Finance Division Abdur Rouf Talukder was the special guest at the ceremony, and NBR Chairman Abu Hena Md Rahmatul Muneem presided over it.
The NBR collects tax at source from 53 sections under the income tax act at present, such as tax on interest income of depositors and source tax on export proceeds.
More than three lakh agencies, both public and private, are responsible for deducting taxes from these sources of income and then depositing the money in the state coffers.
This manual process, which is time-consuming, requires submitting 26 reports to the NBR.
The NBR said the automated system would now ease the process.
The e-TDS system will automate deducting source tax, depositing the money in the government treasury, and reporting to the NBR through the automated challan system.
Mohammad Muslim termed the reforms groundbreaking and said, “At present, tax at source is 60 per cent of the total income tax realisation. With the implementation of automation, the collection of such tax is expected to increase to 85 per cent.”
“There are major complications in our tax rebate system. We must ensure transparency in this,” he said.
He also suggested automating other sections of the NBR.
Acknowledging the limitations of the tax rebate system, the NBR chairman said a digital system has to be put into practice.
Abdur Rouf said if the NBR operations are fully automated, its efficiency will increase a lot.
“The Tk 4,000-10,000 crore gap between the NBR’s realisation and the Finance Division’s target will cease to exist.”
He said the country’s tax culture is very weak, and only 10 per cent of the people pay taxes while at least two crore can afford to pay.
“I have always said the tax rate should be reduced. Tax collection might increase then.”
The NBR planned to introduce the e-TDS system across the country in May last year, which was delayed due to the Covid-19 pandemic.
