The National Board of Revenue (NBR) has introduced e-TDS system to strengthen financial discipline in source tax management and reduce tax litigation.
The electronic tax deducted at source (e-TDS), a digital platform invented by the NBR launched at the NBR conference room on Wednesday.
Speaking as the chief guest at the inaugural function, Auditor General and Controller of Accounts Mohammad Muslim Chowdhury said, “It was done by our young officers. Its technological platform seemed quite smooth to me. Anyone can use it for government transactions on a single platform of payment. Another thing is that its maintenance cost is low.”
The automated system of tax deduction at source, deposit in government treasury and reporting will automatically bring changes in tax management, including source tax cuts and reduce case litigation, NBR Chairman Abu Hena Md Rahmatul Muneem said on the occasion.
This system will reduce revenue evasion and increase revenue collection of the country, he also said.
At present, section 34 of the Income Tax Act has provisions for deduction of withholding tax and section 19 has provision for collection of source tax. Manual monitoring of tax deduction and collection at source under section 53 is time-consuming. Withholding tax at each source, the tax deduction authority has to submit a total of 26 reports including 2 half-yearly returns and 24 monthly statements, officials said at the programme.
In addition, tax deduction at the prescribed rate, with proper code and timely source tax deduction is a big challenge for the authority. After the implementation of this newly invented automation system, the main source of revenue of the income tax administration will play a helpful role in strengthening financial discipline in tax management.
As a result, revenue evasion will decrease and revenue collection will increase, they added.
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According to NBR officials, the automation will eliminate the hassle of submitting huge amounts of documents and associated invoices in the source tax sector and the confusion in calculating various arithmetic calculations. In this system, a source tax deducting authority can login and complete all its activities and pay instant tax through this invoice system. As a result, the income tax authorities will be able to easily conduct monitoring activities.
Meanwhile, NBR has started the work of e-TDS system in May 2020. The test run activities of e-TDS system and e-TDS lab were inaugurated on December 1 last year. The e-TDS systems are piloted in large taxpayer units of the NBR and tax zones 1, 2 and 6.