FBR to enforce retailers tax scheme in 42 cities

• FBR envisages annual collection of Rs50bn from retailers scheme. 
• PM to visit FBR today to get detailed briefing on digitisation.
• Minimum tax of Rs1,200 to Rs120,000 was proposed for retailers.

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to expand the fixed tax scheme for retailers to 42 cities with a minimum tax amount ranging from Rs100 to 10,000 per month, depending on the valuation rates of shops.

Under the International Monetary Fund (IMF) programme, the FBR has envisaged an annual collection of Rs50 billion from the scheme during the current fiscal year. 

Prime Minister Shehbaz Sharif is scheduled to visit the FBR headquarters on Saturday (today) to get a detailed briefing on digitisation and the way forward for placing end-to-end connectivity for broadening the tax base.

Official sources said the FBR shared a detailed working of fair valuation rates of all 42 cities with the retailers' representatives. A minimum tax of Rs1,200 to Rs120,000 was proposed for retailers depending on the valuation of shops across the country. 

“A detailed working has been done by the FBR and shared with retailers. Now the FBR chairman has taken the firm stand that all retailers will have to contribute to national kitty,” said the sources.

The FBR has not yet been notified to expand the Tajir Dost Scheme from six to 42 cities. All schemes for bringing retailers had failed in the past mainly because the political leadership bowed before the pressure exerted by shutter owners/retailers.

Based on the valuation of different markets in different cities, the FBR has proposed to introduce a fixed slab-based scheme for retailers in the tax net.

The FBR launched registration of the Tajir Dost Scheme voluntarily with the deadline of April 30, 2024, in selected six cities in which only 78 retailers registered themselves. Then the FBR involved trader leader Naeem Mir and continued its registration drive. To date, only 44,830 retailers have registered under the scheme, out of over three million retailers countrywide.

The Point of Sale (PoS) machines were installed in branded shops, but a lack of proper technology, operational framework and piecemeal approach within the ranks of FBR failed all IT-based solutions, including PoS, Track & Trace and Digital Invoicing.

Originally published in The News