ISLAMABAD: The National Assembly Standing Committee on Finance was informed on Wednesday that the government is collecting a huge amount of Rs 620 billion in the form of taxes from consumers through electricity bills.
Officials of the Federal Board of Revenue (FBR) Wednesday informed the committee that the FBR is collecting 18 per cent sales tax and withholding tax on electricity bills. Slabs of withholding tax have been specified for commercial consumers. Where the monthly bill of a domestic consumer exceeds Rs 100,000, the withholding tax is also charged. Fixed sales tax is also collected from Tier-II retailers. The total accumulative collection of sales tax and withholding taxes amounted to Rs 620 billion.
MNA Sharmila Farooqi from Pakistan Peoples’ Party (PPP) declared the Retailers Fixed Scheme as Tax Amnesty due to facility of no audit of retailers.
The committee cleared the scheme as the Chairman of the Committee, Syed Naveed Qamar, stated that the government would have to start from somewhere to bring 3.5 million retailers in the tax net.
Qamar noted that the one-year pilot phase of Retailer Tax Scheme would enable the government to assess the effectiveness of the scheme and address any shortcomings that may emerge during implementation.
Sharmila Farooqi strongly opposed the scheme and argued that if the retailers could be exempted from the audit, then why were other sectors not given the same kind of incentives? She cited the example of the salaried class and declared the retailer’s scheme as discriminatory and a tax amnesty. She said that such a scheme was introduced in Brazil, but they declared it was mandatory; however, the government made it optional, which was bound to fail.
Minister of State for Finance Bilal Azhar Kiani and FBR’s Member Dr Hamid Ateeq Sarwar strongly defended the retailers’ scheme and stated that it was not an amnesty scheme at all.
Bilal Kiani said that under the IMF and Financial Action Task Force (FATF), amnesty cannot be offered.
He said that efforts were made since independence to bring millions of retailers into the tax net, but it miserably failed. Through enforcement, the retailers cannot be brought into the tax net, so the government has found a way to convince them by offering an optional scheme.
Dr Hamid Ateeq Sarwar stated that any amnesty could be characterised on account of three aspects as source of income was not asked, given ways and means to whiten the income or assets, and no audit was done, but in the retailers scheme, no such incentive was made on the first two aspects. On audit, he said that if the FBR found any major discrepancy which does not commensurate with declared income or assets, then the audit would be conducted.
He said that the Compliance Risk Management (CRM) was in place, and in case the FBR found a major discrepancy, then the audit would be conducted. He said that the FBR received data from 57 countries, and if anyone invested abroad, the FBR would be able to follow them.
FBR top Member added that the FBR received over 7.5 million returns and did not have the capacity to hold an audit of more than one per cent. He said that it was the target of the FBR to bring 2 million retailers into the tax net through this fixed scheme.
Copyright Business Recorder, 2026
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