The DSE pays the highest withholding tax via e-TDS among 3,685 companies

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First Dhaka Stock Exchange (DSE) Limited paid the highest withholding tax of Tk 108.62 crore through Electronic Withholding Tax System (e-TDS) among 3,685 registered companies .

Through the e-TDS scheme, launched on October 6 last year, the National Board of Revenue (NBR) has so far collected Tk 259 crore.

Summit Corporation took second place with around Tk 70 crore paid in withholding tax.

In addition, SS Power paid Tk 32.5 crore, Sumitomo Corporation Tk 14.5 crore, North West Power Generation Company Tk 13.62 crore, Prime Bank Tk 4.29 crore and DHL paid Tk 2.64 crore to the coffers of the State via e-TDS.

According to NBR, 28,000 companies nationwide submit annual tax returns each year, and millions of employees work in these companies.

Therefore, consideration is being given to subjecting such companies to a mandatory e-TDS system, NBR sources said.

Withholding tax is an income tax reduction of money paid when making specified payments such as rent, commission, professional fees, salary, interest, etc., by the companies making these payments.

Of the total amount of taxes collected by the BNR each year, 62 to 65% come from TDS.

According to NBR data, in the last fiscal year 2020-21, about Tk 51,000 crore was collected from withholding tax.

But the share of the salaried sector in the overall withholding tax is only 5-6% or Tk 2,000-3,000 crore.

According to a source, NBR wants to increase this share to 20%. Therefore, if all companies submitting returns are placed under e-TDS, NBR believes that an additional Tk 10,000-12,000 crore will be added to state coffers every year.

Last year, the NBR formed a team led by Tax Area 6 Commissioner Mohammad Jahid Hasan to launch e-TDS.

“The whole system was digitized at the end of last year so that the withholding tax of the various institutions can be easily deposited in the state coffers. Thanks to the introduction of the e-TDS system , all companies registered with this system can now easily submit their withholding taxes from their own offices,” Hasan said.

“We can easily find out how much tax is paid by any organization. Later, it will be matched with the taxpayer declaration. This will bring transparency to the entire tax system. To encourage them, companies that submit the highest withholding tax via e-TDS will be rewarded from next year,” he added.

AB Mirza Azizul Islam, an economist and former financial adviser to a caretaker government, believes that the benefits of the NBR’s various automated systems or digital taxation have started to bear fruit.

“With the introduction of e-TDS, companies no longer need to go to the BNR office to pay withholding tax. Institutions are able to deposit source tax money into state coffers through automated invoices from their office. This will encourage the institutions more than before, because on the one hand it will save additional costs and time, and on the other hand the NBR will be able to settle its accounts quickly,” he said.

The e-TDS system allows users to immediately obtain the TDS certificate, monthly report and withholding tax declaration, as well as a challan.

Users will be able to obtain all types of tax deduction information, such as salary payments and many other services, by integrating data sharing with the e-Return system.

Currently, approximately 350,000 businesses across the country deduct withholding taxes and submit them to the NBR. These organizations are required to submit tax returns to the income tax office.

But many companies are unwilling to submit TDS due to the complexity of the procedures.

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