Muhammad Hammad Azhar, State Minister for Revenue Friday conveyed to the business community that the government will divide traders in different categories for payment of fixed tax by them under different slabs, depending on their capacity to pay taxes.
A delegation of traders leaders led by Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce & Industry called on Muhammad Hammad Azhar, State Minister for Revenue and discussed with him various tax issues for improving tax system of the country.
Ajmal Baloch President Markazi Anjuman-e-Tijaran, Ch. Nadeem ud Din President PTI Traders Wing Islamabad, Yousaf Rajput President All Traders Welfare Association Blue Area Islamabad, Sardar Tahir Mehmood President Islamabad Estate Agents Association, Sheikh Awais, Ch. Irfan, Sardar Abid, Khalid Chaudhry and others were in the delegation.
Addressing the delegation, Muhammad Hammad Azhar, State Minister for Revenue said that to facilitate the traders in tax obligations and to broaden the tax net, government was considering to impose fixed tax on them. He said that traders should give their proposals to make fixed tax system successful.
Finance Supplementary (Second Amendment) Act, 2019 has implemented measures included a scheme for small traders and shopkeepers.
He said that government wanted to improve tax system in consultation with stakeholders and business community should come up with good proposals to address the drawbacks of taxation system and to streamline it for taxpayers. He said that traders should also give solid proposals to enhance the tax base of the country.
Speaking at the occasion, Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce & Industry said that government should give good incentives to traders in tax matters so that those who were out of tax system should feel motivated to come into the tax net. He said that ICCI had floated the idea of fixed tax for traders a long time ago and it was encouraging the current government was considering it. He said that government should make different categories of traders and impose fixed tax on them according to their taxpaying ability. Ajmal Baloch said that imposition of fixed tax was a good initiative, however, government should give option to traders to pay tax through old system or through fixed tax regime. He said that government should also consider fixed tax on annual turnover.
The other members of delegation also highlighted various tax issues of traders and offered suggestions to streamline the prevailing tax system. Both sides agreed that further meetings would be held with traders on fixed tax issue.
A tax expert said that under the Traders Tax Amnesty 2016, only 9,090 people took advantage, reflecting a poor response of traders. At present there are 3.5 million traders throughout Pakistan and only 135,000 are in the tax net. Trading sector constitutes around 19 percent of the GDP but traders' tax contribution is only 0.05 percent.