Only 4 New Traders Join Fixed Tax Scheme; FBR Chief Says ‘Good Faith Defeated’

Only four new shopkeepers opted for the fixed tax scheme until the statutory deadline, and Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial admitted that the response remained below expectations, saying traders had "defeated the good faith" of the administration.

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• 3.03 trillion, strengthening its bargaining position with the International Monetary Fund (IMF).
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• The chairman, nevertheless, stated filers were 1.7 million more than in September last year.
• When the committee decided to review the implementation status after one month, Langrial remarked there was a possibility the situation might remain the same.

Meanwhile, the administration additionally offered a 15-day extension in filing all tax returns after receiving 5.7 million returns by the September 30 deadline, against 19 million registered taxpayers. The chairman, nevertheless, stated filers were 1.7 million more than in September last year.

Meanwhile, the poor response to the traders' scheme coincided with the close of the first quarter of the current fiscal year, during which the FBR managed to meet the quarterly target of Rs. 3.03 trillion, strengthening its bargaining position with the International Monetary Fund (IMF). Overall return filers stood at 5.7 million until the statutory deadline, compared with 19 million registered taxpayers.

Headed by Senator Saleem Mandviwalla of the PPP, the Senate Standing Committee on Finance received a detailed briefing from Minister of State for Finance Bilal Azhar Kayani and the FBR chairman on the new fixed tax scheme.

"We are worried that the response to the tax scheme remained below our expectations, " remarked Langrial while responding to a question. FBR's Member Operations Zubair Bilal remarked 787 tax returns had so far been filed under the new scheme, of which only four were new filers. Kayani, the main architect of the scheme, nevertheless, was hopeful it would pick up momentum once the FBR kicked off chasing traders, revealing that there were technical glitches in the application introduced to facilitate first-time filers. FBR Exceeds 3-Month Tax Collection Target.

"If the traders do not opt for the scheme and even the fines prove insufficient to convince them, then strong enforcement measures would have to be taken, " remarked Kayani, hoping the FBR would now go to the field to create awareness of the new scheme.

When the committee decided to review the implementation status after one month, Langrial remarked there was a possibility the situation might remain the same. "Good faith has been defeated" by the traders, he remarked, adding that glitches in filing applications were merely an excuse for not filing returns.

Meanwhile, the administration had rolled out the 1 per cent fixed tax scheme, offering retailers a nominal tax in return for complete exemption from audit and installation of Point of Sales systems.

It was the best-ever scheme offered to any segment in the country, remarked Kayani. "The traders' issue dates back to before my birth and the new scheme is still at the initial stage, " he remarked, hoping the response would grow once the administration began imposing fines.

To a question from PML-N Senator Anusha Rahman regarding whether the FBR had prepared a list of non-compliant traders, FBR's Member Strategic Transformation Dr Hamid Ateeq Sarwar only stated all those who would not file returns would be chased.

To another question, Sarwar remarked the administration was targeting to bring 500, 000 to one million traders into the tax net out of the 3.7 million who were outside the system. Responding to a query regarding collecting Rs. 50 billion from traders in the current year, the FBR chairman remarked that if the scheme remained successful, the collection should be over Rs. 100 billion, but if it failed, there would be negligible payments. Tax Filers Rise Sharply Throughout Pakistan.

According to Kayani, the administration had consulted traders and introduced the scheme accordingly. He continued that within two months, 10, 338 retailers registered through the application, covering traders with annual sales of up to Rs. 200 million. Of these, 2, 337 were new, but only a particularly few filed returns.

In practice, the committee was informed that penalties would initially be imposed in stages, with fines of Rs. 10, 000 at the first stage, Rs. 25, 000 at the second stage, and Rs. 50, 000 at the third stage. Notably, the FBR chairman stressed that extensive awareness campaigns had already been introduced and observed that there was still a perception among some traders that those who did not register through the application would not face penalties. Stay Connected with ProPakistani.

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In short, only 4 New Traders Join Fixed Tax Scheme; FBR Chief Says 'Good is the central thread here, and readers can expect follow-up reporting as the picture becomes clearer.