The FBR has announced a simplified fixation scheme based on valuation of stores, which aims to generate tax revenue for 3.6 million retailers.
- The FBR is considering announcing a simplified anchoring scheme.
- The committee aims to impose the tax on 3.6 million retailers.
- Only 78 retailers are registered under the Tajir Dost Scheme.
ISLAMABAD: Amid a dismal showing of only 44,830 retailers registered under the Tajir Dost scheme, the Federal Board of Revenue (FBR) is considering the option of announcing a simplified fixed regime based on store valuation to bring 3.6 million retailers under the tax ambit.
Every scheme to bring retailers into the tax net has failed miserably for over three decades, at least since the 1990s.
Something different needs to be done to have some impact, but if another cookie-cutter plan is introduced, it will be another failure in the history of this country.
“We are looking at various options to bring the 3.6 million retailers into the tax net and this time the FBR will set different tax rates based on the valuation of the shops. A flat tax may also be introduced to bring them into the tax net,” a top government source confirmed in an interview. news on friday.
Sources said valuation of properties is underway in major cities and towns and may be notified within this month. The FBR will introduce a fixed category-based regime for taxable retailers based on valuation of different markets in different cities.
“Various features of the fixed scheme for retailers are being considered and it will probably be launched as soon as next week,” the official said.
The FBR had launched the Tajir Dost scheme on a volunteer basis in six selected cities with a deadline of April 30, 2024. However, only 78 retailers were able to register.
The FBR then roped in trader leader Naeem Mir to continue the registration drive.Till now, only 44,830 out of over three million retailers across the country have adopted the scheme.
Shutter power has continued to force the establishment and the FBR to take stringent action against retailers. The FBR recently took steps to levy taxes through electricity tariffs and size of shops but all attempts have failed.
Though POS (Point of Sale) terminals were installed in branded shops, lack of proper technology, operational framework and piecemeal approach within the FBR meant all IT-based solutions including POS, tracking and digital invoicing failed miserably.
A top FBR official argued that there was no element of a unified vision for the documentation of our country’s economy as no mechanism existed locally for the registration of retailers, meaning the government essentially assumed that the FBR would register all retailers and bring them into the tax net without an allocated workforce.
The FBR has decided to launch a fixed fee scheme for retailers next week. Earlier, it was supposed to collect just Rs 12,000 from retailers on a monthly basis of Rs 1,000. Retailers will have to fill up a simplified form.
To facilitate a sustainable medium-term adjustment, the government informed the International Monetary Fund (IMF) that it will focus on mobilizing significant additional revenues through policy reforms, including broadening the tax base, especially in under-taxed sectors, strengthening revenue administration, and encouraging greater and more balanced fiscal efforts by provinces.
The enforcement of income tax returns and collection of minimum advance income tax will commence from July 1, 2024.
