The Federal Board of Revenue (FBR) has made the decision to extend the fixed tax system for merchants to 42 cities. Depending on the store valuation rates, the minimum tax amount would vary from Rs100 to Rs 10,000 each month.
The FBR has projected that, under the International Monetary Fund (IMF) program, the plan will provide an annual collection of Rs50 billion in the current fiscal year.
Prime Minister Shehbaz Sharif is expected to visit the FBR headquarters to receive a comprehensive briefing on digitization and the next steps for establishing end-to-end connectivity in order to increase the size of the tax base.
According to official sources, the merchants’ representatives received a comprehensive breakdown of the 42 cities’ fair valuation rates from the FBR. Retailers were to pay a minimum tax ranging from Rs1,200 to Rs120,000, dependent on the value of their stores nationwide.
“The FBR completed a thorough analysis and shared it with merchants. According to the sources, the FBR chairman has now firmly said that all merchants must make contributions to the national budget.
The Tajir Dost Scheme’s expansion from six to 42 cities has not yet been communicated to the FBR. Previous attempts to bring in stores have all failed, mostly due to the government leadership caving in to pressure from shutter owners and businesses.
For merchants within the tax net, the FBR has suggested introducing a set slab-based structure based on the worth of various marketplaces in various cities.
With a deadline of April 30, 2024, the FBR opened voluntary registration for the Tajir Dost Scheme in six cities, however only 78 merchants enrolled. After then, the FBR kept up its registration push and included merchant leader Naeem Mir. Out of nearly three million merchants nationwide, just 44,830 have enrolled under the program thus far.
The Point of Sale (PoS) devices were placed in branded stores; however, all IT-based solutions, including as PoS, Track & Trace, and Digital Invoicing, failed due to inadequate technology, an uncoordinated operational structure, and a fragmented attitude within the ranks of FBR.