NBR launches automated tax withholding

The National Board of Revenue (NBR) has launched an electronic tax deduction at source (e-TDS) system to automatically settle tax and advance income tax refund claims for taxpayers.

"Once the e-TDS is fully operational, taxing at source will increase to 85% from the existing 60%," said Mohammad Muslim Chowdhury, comptroller and auditor general (CAG) of Bangladesh, upon inaugurating the system in Dhaka on Wednesday.

He also suggested the revenue board replicate the digitised taxation in other areas of revenue collection too.

Manual tax collection at source is time consuming and the entire process is burdensome as well. For instance, a refund requires 26 reports to be submitted at public offices, according to the revenue board.  

On the contrary, the newly introduced e-TDS deducts taxes at source automatically, deposits it to the state coffers, and reports with an automated challan (A-Challan).

The revenue board had planned to introduce the e-TDS system across the country earlier in July, but that was delayed by the pandemic.

The CAG said at the inauguration ceremony that the system features an automation intelligence interlinked with pay-points such as the Bangladesh Railway and the Bangladesh Road Transport Authority.

Acknowledging the limitations of the tax authorities in refunding, revenue board Chairman Abu Hena Md Rahmatul Muneem underscored the importance of digitisation in taxation.

Abdur Rouf Talukder, senior secretary of the Finance Division, said automation of revenue collection would help minimise gaps in revenue targets vis-a-vis collection.

Explaining the benefits of tax payment online, he cited the example of the government's pension scheme.  

"Previously, more than 9 lakh pensioners were paid. But after digitising the payment system, 82,000 pensioners just vanished from the pay-out list since they had either died or did not qualify for the money."

"The government received too many applications after inviting applications for Tk2,500 Covid aid support. There were applicants who had Tk50 lakh investments in savings tools. However, genuinely needy people could only be identified since there was online cross-checking," said Abdur Rouf Talukder, citing another example of the value of digitisation.  

Noting that the automation of revenue collection will raise the number of taxpayers, he said Bangladesh is currently supposed to have 2 crore taxpayers, but only lakhs of people are now paying taxes.

"The entire work of e-TDS has been done by income tax officials and no third party had to be hired for it. The NBR did not have to spend any money for this," said the revenue board chairman.

Abdur Rouf Talukder said the finance ministry too has developed numerous online service tools "in-house", saving the public money.

40 banks have also been linked to the e-TDS so that facilities can be availed from any place in the country.