The Federal Board of Revenue (FBR) is considering a new proposal from traders to collect advance taxes based on the type of businesses operating in the market.
According to sources, traders are seeking the option to pay taxes on an annual basis, though they are currently required to make quarterly advance payments. The first instalment for the July-September period of the 2024-25 fiscal year is due in October 2024.
It was further explained that collecting taxes based on business categories could streamline the process, as it would be more efficient than conducting time-consuming door-to-door market surveys. Therefore, one of the key proposals under review is to categorize businesses for tax collection.
The FBR will classify major business categories, and a fixed advance tax may be applied to all types of businesses accordingly. Shops will also be categorized based on their business type.
Additionally, the current monthly fixed tax payment system might be replaced by a quarterly payment mechanism, pending necessary amendments to the FBR’s notification.
Traders have requested that the advance tax be paid on an annual basis, though they acknowledge that this might be challenging for them, he said.
He mentioned that the tax would be adjustable for traders. However, the FBR has agreed to lower the upper fixed tax bracket from Rs 60,000 to a more reasonable level.
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Meetings between traders’ representatives and the FBR are being held regularly to resolve various issues, including tax payments.
He also stated that the FBR will accommodate all legitimate demands of the traders, including amendments to the relevant notification under the Tajir Dost Scheme.
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