FBR Formulating New Scheme for Traders to Replace Fixed Tax Regime

The Federal Board of Revenue (FBR) is chalking out a new scheme for the trader’s community in consultation with the Chief Commissioners of the Regional Tax Offices (RTOs) and leading trade bodies across the country.

Sources told Propakistani here on Friday that the FBR has conducted an internal exercise on the trader’s new scheme. This would be the third consecutive scheme for small shopkeepers and retailers. The new exercise was started when the traders’ community on Thursday conveyed reservations to the FBR over the old scheme restored under the Tax Laws (Second Amendment) Ordinance, 2022.

The FBR has directed the Chief Commissioners of the RTOs to give their comments and recommendations for finalizing the new scheme. Most of the RTOs have submitted their recommendations to the FBR. The RTOs have been informed about the viewpoint of traders in their respective cities and the RTO’s comments on the new scheme. The FBR has also taken the viewpoint of Markazi Tanzeem-e-Tajiran Pakistan.

The FBR will consolidate the recommendations and finalize the new scheme for onward submission to Finance Minister Ishaq Dar.

Retailer’s Perspective

President of the association Muhammad Kashif Chaudhry had informed the FBR that the scheme which has been restored under the recently-promulgated presidential ordinance was not acceptable to the trader’s community. The association had shared the detailed plan of a simple fixed scheme with the FBR. The fixed tax scheme should be practical for small traders and shopkeepers across the country.

Traders are suffering badly due to the past decision of imposing a sales tax on electricity bills, increasing electricity and gas prices, and the continuous depreciation of the rupee against the dollar. Traders have to pay income tax, sales tax, further tax, extra sales tax, and other taxes on the bills, traders opined.

According to the FBR, the government has withdrawn the fixed tax on retailers through the recently-promulgated ordinance. Any new scheme of tax on retailers will be planned and implemented in consultation with the traders. In the recent past, the FBR chairman held a detailed meeting with the representatives of traders from all across the country at the FBR House Islamabad

Earlier on 25th August, a meeting with the representatives from all across Pakistan under All Pakistan Anjuman-e-Tajiran was also held by the chairman FBR Asim Ahmed in Islamabad. While addressing the participants of the two meetings, the chairman FBR resolved to keep follow-up meetings at the FBR headquarters and also at the regional level so that, through consultation and consensus, a feasible and workable scheme of taxation for retailers and traders is evolved.

The traders were requested to make in-house deliberations among themselves and firm up their suggestions for the future tax scheme to be rolled out next month.

Under the Tax Laws (Second Amendment) Ordinance, 2022, the Fixed Tax Scheme introduced for retailers (other than tier-I retailers) on commercial electricity connection has been withdrawn with effect from July 1, 2022, and the previous regime (prevailing before Finance Act 2022) has been restored. Instead of a fixed tax on retailers that will reduce the revenue of Rs. 42 billion, FBR will now revert to the old system of ad valorem tax.



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