Tax compliance taking big toll on large cos
Survey by Deloitte reveals large companies spend 70% of time on tax issues as major challenge is TDS compliance
New Delhi: Tax teams at large companies spend around 70 per cent time on an average on tax compliance and wants cross-utilisation of data collected by various government agencies to cut down on reporting requirements, a Deloitte survey said on Tuesday.
A big challenge faced by organisations includes TDS compliance, the survey said, adding simplifying reporting under tax regulations would make reconciliations quicker and more efficient.
“The disproportionate amount of time spent by tax teams on tax compliance, more so in larger organisations, is an area of concern and needs to be addressed by way of discussion between the tax administration and taxpayers,” said the Deloitte survey on ‘Income-tax digitalisation in India’.
Tax teams in large, complex organisations, despite their enhanced use of technology in tax, spend a high proportion (around 70 per cent on average) on tax compliance. Given the significant amount of data involved, the reconciliation of TDS data and processing/re-processing of data requires large teams to focus full-time only on TDS compliance; in light of the fact that more transactions are coming within the purview of TDS, the problem is growing in complexity, the survey said.
“Today the amount of time corporate taxpayer spends on compliance, the demand is overwhelmingly of digitalisation of compliance. There is a big burden of compliance and reporting that takes away most of their time,” said Deloitte India Partner Rohinton Sidhwa. Two-thirds of the survey respondents and 84 per cent respondents from companies with a turnover of more than Rs6,400 crore highlighted that reduction in the number of income-tax compliance by utilising filings made by taxpayers under other regulations, including GST returns, annual return filing with MCA, and FEMA reporting, can drive tax digitalisation.
Simplifying reporting under tax regulations, such that reconciliations are quicker and more efficient, was another key ask from respondents, especially from larger companies. Sixty-four per cent of respondents from companies with a turnover of less than Rs500 crore suggested streamlining TDS/TCS compliance with the help of technology, the survey said.
Today the amount of time corporate taxpayer spends on compliance, the demand is overwhelmingly of digitalisation of compliance. There is a big burden of compliance and reporting that takes away most of their time
- Deloitte India Partner Rohinton Sidhwa
