The International Monetary Fund (IMF) wants the Federal Board of Revenue (FBR) to explain how much time it needs to introduce a scheme to add 3 million retailers to the tax net.
The FBR informed the IMF that the final decision lies with the new finance minister expected to be nominated soon. The FBR assured that the scheme is ready for implementation pending government approval.
During a virtual meeting led by IMF Mission Chief Nathan Porter and attended by FBR officials, the IMF sought insights into the FBR’s strategy to achieve the targeted revenue of Rs. 9,415 billion by June 30, 2024.
Sources reveal that the IMF also questioned the FBR’s capacity to tax 3 million retailers, to which the FBR explained its deployment of 147 district officers nationwide to expand the tax base. However, handling such a substantial number of potential taxpayers with limited resources poses significant challenges.
Furthermore, the FBR assured the IMF of meeting the tax collection target of Rs879 billion for March 2024. Given the shortfall of Rs33 billion in February 2024, achieving this monthly target is crucial to prevent additional tax burdens for the remainder of the fiscal year.
The FBR has devised a simplified scheme, including the development of the “Tajir Dost” mobile app by PRAL, a subsidiary of the FBR, for national business registration. The scheme proposes using annual rental values to determine indicative income for tax purposes, aiming to streamline tax filing for retailers.
Efforts are also underway to incorporate online retailers into the tax system, with consultations ongoing with platforms such as Daraz. However, details on how online retailers will be taxed remain to be seen.
The scheme offers no special tax rates for retailers except for early bird and lump sum payment discounts. The Tajir Dost app aims to simplify tax procedures for retailers while ensuring compliance.
Income tax paid under the scheme will be treated as an advance tax, with no refunds. Defaulters may face penalties, including shop closure or monetary fines.
The scheme excludes certain entities like national or international chain stores but encompasses other Tier-I retailers.
FBR can add tax payers in tax net as per commitments with IMF subject to it’s
willingness. It is million dollar question that FBR people will do hard work to attain this target. Shabbar Zaidi has worked by sitting on both side of the table has narrated different story.
Finance Minister him self don’t have to work to add new tax payers. There will be resistance from existent cheaters. It will be difficult task and is golden opportunity for black sheep of institutions to mint money. We do have honest people in FBR but dishonest don’t let them work. Who will take the lead to do the job?Only threats and punishment can not solve the problem. For this we need tactful person. Anyone has any name? Let’s see who is going to be hero? One thing is for sure, without the success of this mission country can not