ISLAMABAD: The federal and provincial governments will launch a fixed income tax scheme (Tajir Doost) for registration of retailers, shopkeepers and professionals during the current month with a major facility of 50 percent reduction in tax payment for voluntary compliance.

Sources told Business Recorder that the government has taken the final decision to register all kinds of retailers under the documentation drive of the Federal Board of Revenue (FBR). Out of 3.5 million potential retailers, only 0.3 million are filing returns and remaining 3.2 million would be registered under the proposed scheme in all major cities.

All kinds of professionals and retail level businessmen would be required to be registered under the government’s drive of documentation of economy.

‘Any new fixed tax scheme without consultation would be rejected’

The basic purpose of the scheme is documentation and not the revenue generation from the retailers. All kinds of retailers would be required to be registered with the FBR through the mobile app ((Tajir Doost). The new retailers would submit basic data of shop size, electricity meter number and other information and get themselves registered with the tax department.

Under the proposal, a retailer’s tax liability will be calculated based on FBR’s property valuation and the rental value of shops. Taking into account the value/ rent of the shop, the mobile app would automatically calculate the indicative tax of the retailer. The annual tax would be calculated and divided into 12 months for payment of advance tax on a monthly basis.

The FBR will give a facility of 50 percent reduction in tax payment for those retailers who would voluntarily register themselves under the new scheme.

According to the Federal Board of Revenue (FBR), they are taking measures to expand the taxpayer base. In January 2024, the FBR plan to launch a scheme for door-to-door campaign in four provincial capitals and Islamabad to register non-filing retailers and streamline their tax filing.

By cross-referencing tax filings with electricity meter data, we will detect evasion and conduct audits when required.

The FBR will implement safeguards in the form of strict supervision through random audits of assessments filed under the scheme to verify correctness of valuations and payments.

The FBR will launch this scheme with least discretion for the field offices to alter valuations and assessments to protect the potential revenue raised from these actions. To avoid double taxation, monthly advance tax payments under the scheme will offset final income tax liabilities at year-end at the time of return filing, but no refunds of such advance payments of taxes will be issued, FBR added.

Copyright Business Recorder, 2024

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