Retailers of Karachi, Islamabad, Lahore, Peshawar, Quetta, Islamabad to be taxed

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to impose a tax on retailers in five major cities of the country including the four provincial capitals and the federal capital, sources told Geo News on Thursday.

A revenue of Rs100 billion, they said, would be added to the national exchequer by taxing the 3.5 million merchants and the FBR had prepped a scheme for that purpose.

“In the first phase, retailers will be taxed in Karachi, Islamabad, Lahore, Peshawar and Quetta,” they said.

They said the taxation would be based on the size of the shop and the volume of its annual income and it would be collected every month.

The sources said the scheme was completely ready and they would launch it upon getting the green light from the government.

At least 10% advance tax would be charged on retailers’ annual income, they said adding that under the scheme the tax would be imposed on businesspersons associated with any sector.

The News reported last month that after the International Monetary Fund's (IMF) rejection of introducing any fixed scheme for retailers, the caretaker government had finalised the 'Tax Asaan Application' for collecting tax from small shopkeepers based on the valuation of each shop determined by the FBR.

Official sources had confirmed that the retailers’ scheme was almost finalised and now the caretaker government would grant permission to launch this scheme before the completion of its stipulated timeframe.

In the past, every scheme to bring millions of retailers into the tax net met with failure.