FBR-retailers talks still at stalemate

ISLAMABAD: The talks between the FBR and retailers on the Tajir Dost Scheme ended in deadlock on Monday, with both sides sticking to their guns.

The FBR, however, decided to constitute a committee — comprising the traders’ representatives — to review the highest indicative fair market value rate of Rs60,000 per month announced for 84 markets countrywide, and bring it down if some retailer claimed his income was not up to the indicative mark.

During Monday’s talks, the retailers rejected the scheme in totality and promised to come up with their set of proposals to boost tax collection. “We have asked the retailers to come up with a proposal that increased our tax collection from the retailers up to Rs100 billion but it is not possible that they refuse to come into the tax net,” a top board official told this correspondent.

The IMF has endorsed the Tajir Dost Scheme under which the retailers have paid out just Rs0.5 million tax so far. The deposited amount could be termed just peanuts keeping in view the retailers’ income brackets.

Secondly, the retailers objected to the monthly payment of income tax to which the FBR chairman said he paid his income tax every month. Sources said the government incentivized them to place an indicative fair market value for fixing the tax, otherwise under the normal tax regime, the progressive taxation went up to 35 to 40 percent on higher income brackets.

The proposed committee, the sources said, would be constituted soon with the mandate to resolve and facilitate the implementation of the scheme for all practical purposes. When an FBR official was asked about the endorsement of the scheme by the IMF and that if the retailers had come up with alternative plans for the government to satisfy the IMF, he replied that the FBR would not have any problem if the tax from the retailers went up to Rs100 to Rs150 billion against the initial estimates agreed with the IMF to the tune of additional Rs50 billion for the current fiscal year.

Out of 3.3 million retailers across the country, only 270,000 were return filers during the tax year 2023 with a contribution of Rs34 billion tax to the national kitty including tier-1 retailers, who owned the branded shops.

The total number of the registered retailers stood at 4,16,000 out of which approximately 2,69,000 were return filers who paid only Rs33.98 billion during the last tax year.