Fixed Tax Scheme: 2.5m retailers to be brought into tax net

ISLAMABAD: Federal Board of Revenue (FBR) Chairman Asim Ahmad on Saturday said the FBR has estimated to bring 2.5 million retailers into the tax net under the new Fixed Tax Scheme announced in the budget (2022-23).

During the post-budget press conference held here at the P-Block of the Pak Secretariat on Saturday, the FBR chairman stated that the FBR has obtained legal powers under the Finance Bill 2022 to ensure enforcement through technology for controlling tax evasion in major sectors of the economy.

The only way to check evasion is through enforcement with the help of IT systems and technology.

He stated that the FBR has estimated to bring 2.5 million retailers into the tax net under the new fixed tax scheme announced in the budget (2022-23). The shoppers and retailers would be required to file a simple return and they would become filers of income tax returns.

Thus, retailers would be documented on payment of a nominal amount of tax.

The FBR will charge fix tax on retailers other than tier-1 as retailer will have to pay Rs3,000 fixed tax up to monthly electricity bill of Rs30,000, Rs5,000 on monthly electricity bill of Rs50,000, Rs10,000 up to electricity bill of Rs100,000.

According to him, the new law has given powers to the FBR for enforcement through technology including track and trace, point of sales system, and other integrated/IT systems of the FBR.

Ahmad further stated that the scanners have been installed at certain ports and the remaining would also be fixed at necessary ports for checking of containers/cargo etc. He said that we will expand the scope of the track and trace system to other sectors. From July 1, 2022, it would be applicable on the tobacco sector except for those companies which have obtained a stay order from the Peshawar High Court.

To a query on expected litigation in the matter of federation taxing immovable properties, Ahmad was of the view that the tax proposed under Finance Bill 2022 on “deemed income” of non-productive immoveable properties including un-utilized residential/commercial/industrial plots, farm houses etc cannot be challenged in courts.

The FBR chairman added that the taxation on the basis of “deemed income” is not a tax on property. It is a tax on “deemed income” basis which is a very old concept in the income tax law.

Copyright Business Recorder, 2022