Small traders/retailers ‘Fixed tax’ regime will be applicable across country

ISLAMABAD: The Federal Board of Revenue (FBR) has clarified that the fixed tax regime for small traders and retailers will be applicable across Pakistan irrespective of geographic location without any discrimination.

Spokesperson of the FBR Asad Tahir informed a TV channel on Wednesday that there is no difference in fixed tax payments for the traders in Karachi, Islamabad, and Lahore, but the only difference in tax rates is between the filers (persons appearing on the Active Taxpayers’ List) and non-filers.

The new tax regime is actually a big facility that traders could take advantage of. Traders should approach the concerned Commissioner and file their income tax returns and be part of the active taxpayers’ list and take advantage of the fixed tax regime.

The FBR official clarified that the fixed tax regime is actually not a new development and it has been in effect since 2014 when commercial consumers were split into two categories based on their monthly bills.

As of 1st July 2022, commercial electricity bills up to Rs30,000 would be levied with a fixed tax of Rs3,000; a Rs5,000 tax would be levied on bills between Rs30,001 and Rs50,000 and bills exceeding Rs50,000, but does not exceeding Rs100,000 would be subjected to a fixed tax of Rs10,000.

Small retailers: fixed tax regime rationalized

The aforementioned rates are applicable for small traders and retailers who are on the Active Taxpayers’ List and have cleared all dues for the years 2020 and 2021. Non-filers would be automatically charged double the amount.

Appealing to the public, the spokesperson shared that “This is a fixed tax applicable every month and the same regime will be in place regardless of geographic location. This is actually a very big facility being offered to small traders and retailers and they should take advantage of it. They should go to their relevant commissioner and clear their prior dues and get on the active taxpayer list to take advantage of the benefit.”

Further clarifying, the FBR spokesperson stated that the department cannot monitor the individual business activity of hundreds of thousands of commercial connections across the country, till the commercial connections are in their own names. This fixed tax is full and final discharge of tax liability to be paid by the small traders from July 1, 2022. There is no other tax required to be paid by them.

The FBR spokesperson appealed to citizens to enter the tax net and assured them of the FBR’s full support, as a strong FBR could be a pillar for a strong Pakistan.

Copyright Business Recorder, 2022