FBR expects retailers, wholesalers to avail tax amnesty scheme

LAHORE: The Federal Board of Revenue (FBR) wants a majority of retailers and wholesalers, who are paying monthly electricity bills of Rs50,000 or above but not filing returns, to avail the tax amnesty scheme.

“Almost 2.8 million retailers monthly pay Rs50,000 electricity bill. Of them, nearly 0.6 million are filling their returns and 2.2 million are not filers,” said Dr Muhammad Irshad Khan, Member (operations) FBR, addressing a press conference.

Khan said such non-filers could avail the voluntary tax compliance scheme (VTCS) launched by the government to broaden the tax net.

He forecast that one to 1.2 million new taxpayers will be added to the tax net, basing his prediction on the response from the traders and retailers who started availing the VTCS.

“Around Rs160 to 170 billion are likely to be collected from the new taxpayers under the VTCS,” he said.

The regional chief commissioners will hold awareness sessions on VTCS for local trade bodies and tax bars associations on February 13 in Multan, Sialkot (February 15), Rawalpindi (February 16), Karachi (February 17), Lahore and Gujranwala (February 18), Faisalabad (February 20), Sukkur (February 23) and Islamabad (on February 25).

The tax amnesty scheme gives traders an opportunity to become part of the tax net. The traders will be exempted from sales tax and all kinds of audit for the last five years and the next four years till 2018. They will not be made a withholding agent. During this period, they will not be served with any kind of notice under any section.

The VTCS beneficiaries will also be exempted from wealth statement. They have to pay just 0.1-0.2 percent turnover tax and they will be included in the active taxpayers list within next 24 hours.

General Secretary Naeem Mir at All Pakistan Anjuman-e-Tajran said the scheme will have a positive impact as it will encourage documentation of the informal economy by allowing non-filing traders to regularise their undeclared working capital up to Rs50 million by paying a nominal tax.

President Mohsin Nadim at the Pakistan Tax Bar Association said all the tax bars agreed that VTCS is a beneficial plan to enhance the tax net in the country.

Nadim said lawyers and tax advisors will conduct a session on 17 January in Karachi, which will be attended by all the tax bars from interior Sindh.