IMF conditions: FBR launches retailers’ scheme in six cities

ISLAMABAD: In a bid to comply with the demand of the IMF, the government has launched registration of Tajir Dost Scheme in six largest cities of the country including four provincial capitals and Rawalpindi as well as in Islamabad.

The cities where this scheme is launched included Karachi, Lahore, Islamabad, Rawalpindi, Quetta and Peshawar in the first phase. Under this scheme, the retailers will kick start registration from April 1, 2024 and then the tax collection will take place from July 1, 2024. The FBR will take online marketplace platform into tax net as well under this scheme. “We intend to bring one million retailers into tax net,” said one top official of the FBR on Friday when contacted by The News.

According to Statutory Regulatory Order (SRO) 420(1)/2024 stating on Friday that the draft special procedure for small traders and shopkeepers which the FBR proposes to prescribe under section 99B of the Income Tax Ordinance, 2001 (XLIX of 2001), is hereby published for information of all persons likely to be affected thereby and, as required by subsection (3) of section 237, notice is hereby given that objections or suggestions thereon may for consideration of the Board be given within seven days of the publication of the draft in the official gazette. Objections or suggestions received from any person before the expiry of the said period shall be taken into consideration.

“DRAFT SPECIAL PROCEDURE FOR SMALL TRADERS AND SHOPKEEPERS (TAJIR DOST SCHEME)

In exercise of powers vested in the FBR under section 99B of the Income Tax Ordinance, 2001 (hereinafter called the Ordinance), the following special procedure for small traders and shopkeepers to be called Tajir Dost Scheme, 2024 (hereinafter called the scheme), is hereby prescribed.

I. Scope. — (1) This scheme shall apply to the traders and shopkeepers operating through a fixed place of business including a shop, store, warehouse, office or similar physical place (hereinafter referred to business premises) located within the territorial civil limits including cantonments in the cities as specified in the schedule to this scheme for registration and payment of minimum advance tax.

(2) Sub-paragraph (1) shall not apply to a person -being a company or; operating as a unit of national or international chain stores in more than one city or; a person or a class of persons specifically excluded by the Board.

2. Commencement. - The scheme shall come into force with effect from April 1, 2024 except Part-II, which shall come into force with effect from July 1, 2024.

3. Provisions of the Ordinance to apply. - Without prejudice to the provisions of this scheme, all provisions of the Ordinance shall apply to the persons specified under this scheme in respect of — computation of income for a tax year and tax payable thereon, collection and deduction of tax as provided in the Ordinance, computation and payment of advance tax liability under section 147 of the Ordinance, section 4C and 7E if liable to pay such tax, chapters IX, X, XI, XII, XIII of the Ordinance and the schedules thereto, if not specified in clauses (a), (b), (c) and (d) above.

4. Registration in the National Business Registry (Tajir Dost). (1) Every trader and shopkeeper shall apply for registration under section 181 of the Ordinance or through Tax Asaan app or on FBR’s portal or through FBR’s Tax Facilitation Centers by 30th day of April, 2024. (2) If a person, who is required to be registered under sub paragraph (1), does not apply for the registration under the said sub paragraph, the Commissioner Inland Revenue shall register the trader or the shopkeeper as the case may be. (3) The provisions of section 182 of the Ordinance shall, mutatis murandis apply to the trader or shopkeeper who has not applied for registration under the sub paragraph (1).

Part-II

1. Payment of Advance Tax [with effect from 1st July, 2024]

5. Minimum monthly advance tax payable by a person. — (1) every person shall be liable to pay monthly advance tax in accordance with this paragraph.

The advance tax paid under sub paragraph (1) shall be the minimum tax in respect of income from the business covered under this scheme.

The amount of monthly advance tax for a tax year shall be computed in the manner as may be prescribed.

Where the advance tax computed under sub paragraph (3) is zero, the advance tax payable under the sub paragraph (1) shall be Rs1,200 per annum. Provided that where the income of the person is exempt from income tax under any provision of the Ordinance, sub-paragraph (1) shall not apply. Provided further that the advance tax payable shall be reduced by twenty five percent of the whole or the balance: — if the person pays in lump sum the whole or the balance as the case may be, of remaining advance tax for the relevant tax year on or before any of the due dates for payment of such tax under the said paragraph; or if the person who has not filed income tax return, files income tax return for Tax Year 2023 before the due date for payment of first monthly installment.

Mode and manner of payment of advance tax. - (1) The monthly advance tax payable under paragraph 5 shall be paid with effect from Ist day of July, 2024 for the relevant tax year and the first payment will be due on 15’ of July, 2024 and thereafter on 15’ of every month.

(2) The tax payable under paragraph 5 for a tax year shall be paid through a separate Computerized Payment Receipt against the Payment Slip ID (PSID) generated by Tajir Dost module or through FBR’s portal or through FBR’s Tax Facilitation Centers.

The Board with the approval of Minister in Charge may amend the scheme from time to time so as to add, alter, omit or modify any provision therein.

Definitions. — (1) in this scheme, unless there is anything repugnant in the subject or context, — “annual rental value” means ten percent of the fair market value of the business premises; “business premises” include all business places, store, warehouse, or any other place connected to business or an office or a home operating as a business place; “indicative income” means amount calculated on the basis of the annual rental value in accordance with the formula as may be prescribed; “fair market value of business premises” means the amount calculated as per the valuation of immoveable properties notified by the Board under section 68 of the Income Tax Ordinance, 2001(XLIX of 2001), or where such valuation has not been notified by the Board, the values fixed by the District Officer (Revenue), or Provincial or any other authority authorised to fix such values for the purposes of stamp duty; “National Business Registry” means a central repository database of traders and shopkeepers which is accessed through Tajir Dost module of Tax Asaan App.