Federal Budget: PBF urges govt to implement fixed tax regime for traders

KARACHI: Pakistan Business Forum (PBF) has demanded the government to implement a fixed tax regime for traders in the coming budget, stating that the Tajir Dost Scheme (TDS) has not produced the desired results.

Chief Organiser of the PBF, Ahmad Jawad has recommended a tax of Rs 20,000 per month for large retailers and Rs 10,000 for small retailers. He has also called for a fixed tax of Rs 5,000 to be imposed on retailers in villages and small towns.

He suggested that fixed tax collection could be done through electricity bills, and once a fixed tax is paid, traders should not be asked for any further questions.

Pakistan Business Forum has demanded that if the economy is to function, the fixed tax regime should be implemented without pressure.

He further stated that the government has taken full care of traders over the past 77 years, but now it must be serious about collecting taxes from them. Financial resources cannot be increased without collecting taxes from traders. Wholesale and retail trade accounts for 18.1% of GDP, but only contributes 2% to direct taxes.

On the other hand, the industrial sector makes up 18.4% and contributes 40% of total taxes. He further stated that to stabilize Pakistan’s economy, the annual tax collection should be at least 15 trillion rupees.

Jawad reiterated PBF’s stance that FBR needs to expand tax-net and simplify the taxation system to improve tax-to-GDP ratio; instead of further squeezing the existing taxpayers.

However, the process should be fair & transparent and undertaken in a business-friendly manner, he added.

He stressed that Pakistan’s tax-to-GDP ratio stands poorly at 9 percent while the regional and sub-regional countries have achieved that ratio in the range of 16 – 18 percent. As FBR should not impose tax on retailers on turnover basis; but, there should be a fixed tax.

VAny imposition on turnover basis will negatively affect the acceptance or registration rate and threaten the dynamics of established business practices.

It may recall here Successive governments in Pakistan have tried and failed to bring the country’s traders and retailers into the tax net.

Copyright Business Recorder, 2025