FBR's New Fixed Scheme Targets Retailers for Tax Compliance

The Federal Board of Revenue (FBR) in Pakistan has been striving to bring retailers into the tax net through various schemes. The latest initiative, the Tajir Dost Scheme, aimed at registering retailers, has faced challenges with only 44,830 retailers enrolled out of a target of 3.6 million. This has prompted the FBR to consider a new fixed scheme based on shop valuation to reach a wider retailer base.

The proposed fixed scheme will introduce slabs based on shop valuations, with property valuations in major cities currently underway. The FBR is working on launching this scheme soon, with the goal of attracting more retailers to register for taxation.

Despite previous attempts, such as the voluntary Tajir Dost Scheme in six cities, yielding limited success, the FBR is determined to enhance tax compliance among retailers. Efforts to utilize methods like electricity bills and shop sizes for tax collection have not yielded the desired results, highlighting the need for a new approach.

The upcoming fixed scheme, set to be introduced with a yearly fee of Rs12,000, will simplify the registration process for retailers. The government's commitment to improving revenue collection through policy reforms and better tax administration has been communicated to the IMF.

Starting July 1, 2024, the FBR will intensify efforts to enforce income tax returns and collect minimum advance income tax, signaling a renewed focus on expanding the tax base and ensuring fiscal sustainability.

The FBR's initiatives to broaden the tax net among retailers reflect a strategic shift towards enhancing tax compliance and revenue generation. The introduction of a new fixed scheme underscores the government's commitment to improving tax administration and fostering fiscal stability in the country.