The present government’s announcement to notify a fixed tax scheme for small traders in the budget (2022-23) would reduce the participation of the trader’s community in the PTI Azadi March on May 25.
Sources told ProPakistani, that the new scheme would cover those small shopkeepers, who do not fall within the category of Tier-I (big retailers) with simplified documentation for the trader’s community. During the last meeting of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) with the Federal Minister for Finance and Revenue, Miftah Ismail, the Minister agreed to introduce a fixed tax scheme for small traders and resolve all taxation-related issues of business and trade.
It is yet to be seen whether the present government’s lucrative tax scheme for small traders would discourage small shopkeepers from participating in the Azadi March.
However, some traders groups in Lahore have already rejected the PTI Azadi March on May 25.
All Pakistan Anjuman-e-Tajaran (APAT) Chairman Ajmal Baloch informed the media on Monday the fixed tax scheme to be announced by the present government has nothing to do with the protest. The traders having affiliation with the PTI would participate in the protest despite the commitment of the present government to introduce a fixed tax scheme, Ajmal Baloch added.
Last year, FBR Member IR Operations announced that (i) the point of sale (POS) is not related to the small traders; (ii) the change in the rate of advance tax on electricity bills as introduced in the Tax Laws (Third Amendment) Ordinance-2021 will not affect small traders; (iii) there would be no forced sales tax registration of small traders and (iv) the sales tax on electricity consumed by professionals will not affect commercial consumers of electricity.
Member (IR Operations) further informed in the past that all confusions and misunderstandings of small traders on the Tax Laws (Third Amendment) Ordinance were removed. “The Tax Laws (Third Amendment) Ordinance-2021 has nothing to do with the small traders,” FBR Member added.
In the past, Member IR Operations categorically stated that POS did not pertain to small traders. While clarifying Section 114B of the Income Tax Ordinance-2001, Member IR Operations further informed that the general public is being misled by vested groups leading them to believe that their electricity & gas connections will be disconnected and their mobile phones disabled. He clarified that only those persons who are not appearing on ATL will face this treatment.
In the past, the traders’ protest was against the harsh tax policies and complicated and double documentation, which would increase tax evasion and corruption in the country.
Additionally, with the promulgation of The Tax Laws (Third Amendments) Ordinance 2021 for broadening the tax base on September 17, the government has granted sweeping powers to the FBR for disconnection of mobile phones SIMs, electricity, and gas connection of non-filers.
The government has also given powers to the FBR to discontinue gas and electricity connections of persons, including tier-1 retailers who are either not registered or if registered, are not integrated in terms of Section 3(9A) of the Sales Tax Act 1990, a trader representative said.
The FBR has clarified that “the Point of Sale (POS) integration with the FBR, sales tax registration, and imposition of enhanced withholding tax have nothing to do with small traders”.
It further said that the enhanced withholding tax slapped through the presidential ordinance and collected through electricity bills will not be applicable to commercial consumers.
However, the protesting traders demanded that all the powers granted to the FBR through the ordinance be withdrawn.
They further said they would not, at any cost, allow the installation of POS devices and that they have rejected the registration of traders for sales tax.
“The powers granted to FBR through the ordinance should be taken back […] traders are not educated; therefore, they should not be spoken to in technical terms,” the traders demanded.
Markazi Tanzeem Tajiran, representing small traders had postponed their protest call after the FBR and small traders reached an agreement on the Tax Laws (Third Amendment) Ordinance-2021 at the FBR Headquarters.