AGL 40.01 Increased By ▲ 1.23 (3.17%)
AIRLINK 197.85 Increased By ▲ 3.56 (1.83%)
BOP 10.37 Decreased By ▼ -0.47 (-4.34%)
CNERGY 7.13 Increased By ▲ 0.26 (3.78%)
DCL 10.61 Increased By ▲ 0.42 (4.12%)
DFML 43.82 Increased By ▲ 0.69 (1.6%)
DGKC 105.67 Increased By ▲ 9.06 (9.38%)
FCCL 39.60 Increased By ▲ 1.53 (4.02%)
FFBL 80.25 Decreased By ▼ -1.18 (-1.45%)
FFL 14.14 Increased By ▲ 0.11 (0.78%)
HUBC 120.56 Increased By ▲ 1.58 (1.33%)
HUMNL 14.67 Decreased By ▼ -0.10 (-0.68%)
KEL 6.16 Increased By ▲ 0.42 (7.32%)
KOSM 8.26 Decreased By ▼ -0.23 (-2.71%)
MLCF 49.61 Increased By ▲ 3.07 (6.6%)
NBP 74.48 Decreased By ▼ -2.75 (-3.56%)
OGDC 197.07 Increased By ▲ 2.29 (1.18%)
PAEL 35.10 Increased By ▲ 0.36 (1.04%)
PIBTL 8.52 Increased By ▲ 0.14 (1.67%)
PPL 176.26 Increased By ▲ 1.69 (0.97%)
PRL 33.26 Increased By ▲ 0.09 (0.27%)
PTC 25.59 Increased By ▲ 1.02 (4.15%)
SEARL 121.04 Increased By ▲ 11.00 (10%)
TELE 9.90 Increased By ▲ 1.00 (11.24%)
TOMCL 35.23 Increased By ▲ 0.40 (1.15%)
TPLP 12.74 Increased By ▲ 1.05 (8.98%)
TREET 18.97 Increased By ▲ 0.41 (2.21%)
TRG 60.28 Increased By ▲ 0.22 (0.37%)
UNITY 39.02 Increased By ▲ 2.53 (6.93%)
WTL 1.83 Increased By ▲ 0.08 (4.57%)
BR100 11,749 Increased By 48.7 (0.42%)
BR30 36,171 Increased By 760.4 (2.15%)
KSE100 109,970 Increased By 916.4 (0.84%)
KSE30 34,131 Increased By 281.6 (0.83%)

ISLAMABAD: The slapping of 2.5 percent advance income tax on unregistered retailers under the Finance Act, 2024, has stirred up a hornet’s nest, thrusting the entire fast-moving consumer goods (FMCG) sector into the role of withholding agents.

This move has ignited fury among retailers, who vehemently refuse to shoulder this tax burden, declaring it is not the manufacturers’ right to demand such payments.

“Why should we pay this new 2.5 percent income tax to suppliers,” retailers questioned.

They added that if there is a need for payment of any further income tax that should be paid by the manufacturer directly to the Federal Board of Revenue (FBR).

FBR issues list of unregistered retailers

Around 60 percent of the goods supplied by the FMCG sector to the unregistered retailers have been returned back to the manufacturers during the last few days.

The government’s sly manoeuvre has conveniently shifted the tax collection responsibility onto consumer goods manufacturers, bypassing the need for crucial structural reforms to integrate retailers into the tax net.

Major cities like Karachi and Lahore are witnessing retailers rebelling, returning a staggering 30 per cent to 40 per cent of dispatched consignments in outright defiance of the government’s latest measures. Experts are sounding the alarm, urging the government to urgently engage and communicate to generate support for this controversial policy.

“This arm-twisting policy will not work with a disorganised retailer base,” said a tax expert.

The fallout is poised to be catastrophic: skyrocketing costs of goods, plummeting sales, and a devastating blow to demand. Perishable goods, especially in the dairy sector, face severe disruption, threatening to unravel the entire supply chain.

The stakes have never been higher as this explosive tax threatens to upend the market and wreak havoc on the economy.

Copyright Business Recorder, 2024

Comments

Comments are closed.

Notsurprised Jul 05, 2024 05:07am
So? Good. Let people buy from registered and compliant retailers then! Everyone has a reason for not paying taxes.
thumb_up Recommended (0)
Az_Iz Jul 05, 2024 05:14am
Really. The retailers will stop doing business and lose money? And for how long?
thumb_up Recommended (0)
Aam Aadmi Jul 05, 2024 06:15am
Never mind. If the so-called unregistered retailers cannot pay the tax, place the additional burden on the salaried class. In fact all others than the salaried class should be exempted from all taxes.
thumb_up Recommended (0)
Usman Jul 05, 2024 08:21am
No prices will skyrocket as ppl will buy from those who pay taxes and those resisting will realise they are loosing sales.
thumb_up Recommended (0)
T Jul 05, 2024 08:23am
Pakistan never misses any opportunity to fail.
thumb_up Recommended (0)
Aamir Jul 05, 2024 09:48am
Let there be disruption. Let there be chaos. New retailers and online companies will fill the void. But taxes should be paid by everyone
thumb_up Recommended (0)
Retired Jul 05, 2024 10:09am
@Aamir , pay taxes for what? For protocol of govt babus? You're naive to think govt will stop taxing salaried class if others payed taxes. Infact, retailers will pass this tax to end consumers!
thumb_up Recommended (0)
usman Jul 05, 2024 10:50am
@Retired, Your roads,hospitals,education dont come from magic.they are taxpayers money.We dont have oil wells.So pay taxes or go and stay in afghanistan.Thats what you want Pak to be with out taxes.
thumb_up Recommended (0)
Ahmed Jul 05, 2024 11:00am
Ban cash. Demonetize and move everything to digital payments. Let them rebel. People should buy from documented and registered retailers in digital payments. Everything will start falling in line.
thumb_up Recommended (0)
Builder Jul 05, 2024 11:43am
Consumers should be vigilant and not buy the products if they see any undocumented increase in price of the goods - the WHT is on retailer income, not to be passed on to consumers.
thumb_up Recommended (0)
Fahad Javed Jul 05, 2024 02:20pm
This is bad reporting from Business recorder. If the non-registered retailers stop selling then they will go out of business and the customers can buy from legitimate tax paying shops.
thumb_up Recommended (0)
Willow Jul 05, 2024 03:03pm
As budget is better understood and taxes on salaried class become clearer, there will be great dismay.
thumb_up Recommended (0)
Yasser Chattha Jul 05, 2024 03:32pm
...so what was stopping the retailers when FMCGs weren't collecting tax? Who was stopping retailers to register with FBR? Retailers earn a lot, but can't pay taxes. Such negative behavior is that core
thumb_up Recommended (0)
Az_Iz Jul 05, 2024 06:06pm
@Ahmed, agree. More digitization should be one of the solutions.
thumb_up Recommended (0)
Az_Iz Jul 05, 2024 06:09pm
Force every retailer to accept digital payments. QR code payments are being accepted by even street vendors in other low income countries.
thumb_up Recommended (0)
Ali Jul 09, 2024 07:39pm
I am reading the comments and realizing most of you dont even know what this tax means. This withholding tax is not on their income. Thats what income tax is for. Witholding tax is on consumers.
thumb_up Recommended (0)