By Staff Reporter
ISLAMABAD: Finance Minister Mohammad Aurangzeb has signed off on a fixed tax scheme for retailers, with an official notification expected to be issued shortly, a government official said on Monday.
According to sources, the Federal Board of Revenue (FBR) will determine the fair market value of major cities to collect a fixed tax from retailers. The proposed tax range is between Rs100 per month to Rs10,000, depending on the valuation determined by the FBR in different cities.
The notification is expected to be issued soon, and retailers will be required to comply with the new scheme, the source said.
The FBR is expanding its fixed retailers scheme to 42 cities, as part of a broader effort to boost tax revenue and meet International Monetary Fund (IMF) targets.
The Tajir Dost Scheme, launched in April last year, failed to gain traction with only 78 retailers voluntarily registering by the initial deadline of April 30, 2024. The scheme aimed to bring retailers into the tax net but fell short of expectations.
In the budget for 2024-25, the government attempted to impose a fixed tax scheme on manufacturers. However, under the conditions set by the International Monetary Fund (IMF), the government has now decided to notify a revised scheme for retailers. The plan’s success is crucial for Pakistan to meet its fiscal targets under the IMF program.
Pakistan has struggled to bring retailers into the tax net, with only 44,830 registering out of over 3 million nationwide. The expansion of the scheme comes after previous attempts failed due to resistance from retailers and political pressure.
The FBR’s efforts to implement IT-based solutions, including Point of Sale machines and digital invoicing, have been hampered by technological and operational issues. The success of the expanded scheme remains to be seen, as Pakistan’s tax collection efforts have historically faced significant challenges.
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