FBR mulling options to tax 3.6m retailers

ISLAMABAD: The Federal Board of Revenue (FBR) is considering different options to impose fixed tax on 3.6 million retailers across the country on the basis of the size of their shops, ranging from Rs1,000 to Rs5,000 per month.

The FBR has worked out a plan to abandon the collection of tax from small traders and shopkeepers through electricity bills and is now considering fresh fixed schemes for both urban and rural areas.

According to the plan, the caretaker government does not need any new law which requires the promulgation of an ordinance or waiting for the new assemblies to enact amendments in the tax laws for imposing fresh fixed tax scheme for retailers.

This is because under the existing law approved by parliament, the FBR possesses the powers to introduce a scheme for retailers.

It is not yet known whether the caretaker government would be able to face the pressure of shopkeepers or abandon the implementation of its plans to bring all sectors into the tax net.

Under the proposed scheme, it is under consideration to slap Rs1,000 on shop size of 100 square feet, Rs3,000 on shop size of 200 to 300 square feet and Rs5,000 on 500 square feet in urban areas. For rural areas outside the jurisdiction of municipal committees, the proposal is to slap a fixed rate of Rs1,000 on each shop.

Under the scheme, the FBR is proposing to allow the retailers to incorporate the paid tax in the next year’s return filing. There will be a one-page form to avail of this fixed scheme.

When this scribe contacted FBR Chairman Amjad Zubair Tiwana to seek his comments on the proposed fixed scheme on Thursday night, he replied, “No proposal has been finalised as yet. Once the proposal is finalized by the FBR, only then will it be shared with finance minister.”