In Islamabad, the Federal Board of Revenue (FBR) is exploring variousoptions for implementing a fixed tax system for the country’s 3.6 millionretailers based on the size of their shops. This fixed tax would range fromRs1,000 to Rs5,000 per month.
The FBR has devised a plan to discontinue the practice of collecting taxesfrom small traders and shopkeepers through electricity bills. Instead, theyare contemplating the introduction of new fixed tax schemes for both urbanand rural areas.
According to this plan, the caretaker government doesn’t require newlegislation or ordinances to enact these changes since the existingparliamentary-approved laws grant the FBR the authority to establish suchtax schemes for retailers.
It remains uncertain whether the caretaker government will face resistancefrom shopkeepers or proceed with its plans to expand the tax base acrossall sectors. Under the proposed scheme, consideration is being given toimposing Rs1,000 on shops with a size of 100 square feet, Rs3,000 on shopsranging from 200 to 300 square feet, and Rs5,000 on shops measuring 500square feet in urban areas. In rural areas not under the jurisdiction ofmunicipal committees, a flat rate of Rs1,000 per shop is being proposed.
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The FBR’s proposal also includes allowing retailers to offset the paid taxagainst their next year’s tax return, with a simplified one-page form foravailing this fixed scheme. When contacted for comment, FBR Chairman AmjadZubair Tiwana stated that no final proposal has been confirmed yet, and itwill be shared with the finance minister once it is finalized.
