HomeBusinessFBR thinking about changing how it taxes the shops

FBR thinking about changing how it taxes the shops

The Federal Board of Revenue (FBR) is considering implementing a fixed tax scheme ranging from Rs 1,000 to Rs 5,000 per month for 3.6 million retailers nationwide in an effort to simplify tax collection.

The News reports that FBR is coming up with a strategy to stop collecting taxes from merchants and small business owners through electricity bills. They are instead thinking about implementing new fixed plans for both urban and rural areas.

Retailers with stores smaller than 100 square feet may be subject to a tax of Rs. 1,000, while those with shops between 200 and 300 square feet may be subject to a tax of Rs. 500 sq ft, and larger establishments may be subject to a fixed tax of Rs5,000 in metropolitan areas.

A flat fee of Rs. 1,000 per store is being discussed for rural areas that are outside the purview of municipal committees.

Retailers would have the option to file their tax returns the following year with the paid tax included. To make use of this established scheme, a one-page form is anticipated to simplify the procedure.

The FBR Chairman denied that a proposal had been finalized when asked about the proposed scheme. The FBR will formalize the idea before presenting it to the finance minister.

If accepted, the caretaker administration would not require new legislation or wait for new assemblies to implement revisions because the FBR is already authorized to introduce such programs for merchants under current statutes that have received parliamentary approval.

Regarding the reaction of the general public, there is ambiguity. Previous attempts to include shops in the tax system encountered fierce criticism.

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The previous Finance Minister Miftah Ismail’s attempt to expand tax collection through power bills was greeted with stiff opposition; as a result, it was abandoned after Maryam Nawaz voiced concerns on behalf of traders.

The outcome of this new idea depends on how well the caretaker administration handles the pressure from merchants and carries out its objectives to enlarge the tax base across other industries.



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