Only 2 New Retailers Join Tax Net Under Govt’s Fixed Tax Scheme

Meanwhile, the government's fixed tax scheme for retailers has attracted only two new taxpayers so far, despite an annual collection target of Rs.

Key points

• Overall, 6, 631 retailers have prepared draft returns under the scheme, but around 6, 587 were already tax filers.
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• Only 332 returns have been filed under the scheme so far, with retailers paying Rs.

While 315 of the 317 shopkeepers who joined the scheme were already part of the tax system, the scheme has so far brought only two genuinely new traders into the tax system. This indicates that the scheme has created little progress in bringing previously unregistered retailers into the tax net.

As the simplified tax filing facility has received a limited response despite around 5, 000 retailers registering for it, the Federal Board of Revenue is preparing to impose penalties on retailers who fail to employ its Aasaan Tax Scheme. IMF, SBP Discussions to Commence Today on Key Economic Problems.

Only 332 returns have been filed under the scheme so far, with retailers paying Rs. 26.5 million in taxes, according to official data.

Separate figures on the fixed tax scheme show that one of the two new shopkeepers is from Quetta and the other from Rawalpindi. Another 44 new retailers have prepared their returns but have not yet submitted them.

Overall, 6, 631 retailers have prepared draft returns under the scheme, but around 6, 587 were already tax filers. Rawalpindi had the highest number of retailers joining the scheme at 87, but only one was a new filer. Lahore had 61 participants, Karachi 24, Sahiwal 33, Sialkot 25 and Islamabad 23, with new filers remaining particularly limited. Pakistan Now Has Enough Energy Reserves for 19 Years.

In practice, the administration had set an annual tax collection target of Rs. 50 billion from the fixed tax scheme for the current fiscal year. Against this target, only Rs. 26 million has been collected so far, averaging regarding Rs. 81, 944 per participating retailer.

Meanwhile, the FBR has decided to impose penalties if registered retailers fail to avail themselves of the scheme within the stipulated timeframe. Under the terms agreed with traders' representatives, shopkeepers who exercise neither option available under the scheme can be penalized for non compliance. The penalty will be Rs. 10, 000 for the first month of non compliance, Rs. 25, 000 for the second month and Rs. 50, 000 for the third month.

In practice, the fixed tax scheme imposes a 1 percent tax on annual sales of eligible small retailers. In return, participating shopkeepers are exempt from tax audits, the requirement to install a point of sale system and the obligation to act as withholding tax agents.

While these businesses are generally exempt from audits, FBR staff are additionally barred from entering the business premises of retailers covered by the scheme. The scheme is available to retailers operating a single business outlet whose annual sales remained below Rs. 200 million during each of the previous three consecutive years. Finance Minister Calls for Climate Funding for Pakistan.

With the September 30 legal deadline approaching, the administration has begun reviewing its approach toward retailers. At a session chaired by Minister of State for Finance Bilal Azhar Kayani, office-holders additionally discussed the scheme's design and future.

Notably, the Ministry of Finance remarked the gathering decided to step up awareness efforts. The minister directed tax commissioners to coordinate with local tax bars and facilitate retailers in filing their returns through lawyers of their choice.

For context, the legal deadline for retailers to file returns under the scheme is September 30.

Notably, the subdued response to the retailers' scheme comes despite a broader rise in income tax filing. The FBR has received 3.5 million income tax returns nationwide so far this year, compared with 2.5 million during the corresponding period of the previous financial year.

Around Rs. 10 billion was paid along with these income tax returns. Stay Connected with ProPakistani.

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For now, only 2 New Retailers Join Tax Net Under Govt's Fixed Tax Scheme remains the part of the story worth watching, and further updates are likely as more details are confirmed.