The federal government has announced a new fixed tax scheme aimed at bringing 3.5 to 4 million small traders into the tax net ahead of the federal budget.
Finance Minister Muhammad Aurangzeb and Minister of State Bilal Azhar Kayani today introduced a simplified system under which a 1 percent tax will be applied on traders with sales of up to Rs. 200 million.
Aurangzeb said the reform is aimed at improving transparency and strengthening the tax structure on a more sustainable basis. He said the existing system places a heavier burden on salaried individuals and the formal corporate sector, while multiple sectors remain under-taxed.
Aurangzeb said the measure targets millions of small shopkeepers and is intended to improve the tax base.
Retailers with annual sales up to Rs. 200 million will fall under the scheme. Any already-deducted withholding tax will be adjustable against the final liability.
A payment of Rs. 25,000 at the time of form submission will be required.
The scheme is optional, but those who opt in will receive reliefs, including exemption from POS integration requirements and routine audit obligations. It will be available to both filers and non-filers.
Retailers who neither join this fixed regime nor remain in the normal tax system will face penalties.
Street vendors and cart-based sellers have been excluded from the scheme. The framework was developed after consultations with trade bodies.
In Pakistan, a trader is anyone in the goods-selling business, especially operating from a physical shop, and is mainly a tax policy category, not a strict legal profession class. The above-mentioned legislation is for small traders.
Do that to billionaires first.
another of those choo*iya scheme,
25000 is the initial rishwat.