FBR to geo-tag potential retailers, wholesalers

ISLAMABAD: The Federal Board of Revenue (FBR) is considering launching surveys in three major cities with the help of geo-tagging to identify and connect potential retailers and wholesalers with the Point of Sale (POS) machines.

This enforcement measure is going to demonstrate the government’s seriousness about binging the retailers and wholesalers in the tax net. Although Finance Minister Mohammad Aurangzeb claimed last week that the total declared tax of traders, including retailers and wholesalers, stood at Rs413 billion during the current fiscal year against Rs187 billion declared by them in the same period of the last financial year, he did not explain that out of Rs413 billion declared tax amount how much they had paid in shape of Sales Tax and Income Tax.

Sources said out of the declared tax amount of Rs413 billion, it did not come fully into the tax net, as some adjustments were made and the actual paid tax was not much to such an extent.

In the aftermath of failure of Tajir Dost Scheme (TDS) to bring retailers into the tax net, the FBR is considering launching on-ground surveys with geo-tagging in three major cities including Karachi, Lahore and Islamabad in the first stage to identify the potential taxpayers.

The Board will provide a staff along with vehicles to the ground staff in three major cities to identify retailers/wholesalers in big shopping malls and those who are connected with the POS but are not generating all receipts through the machines. If this pilot scheme becomes successful, then it will be replicated across the country.

“We might kick-start on-ground surveys in biggest shopping malls and other potential areas in three major cities in coming week,” said a top official. He further said there were a total of 11,000 shops connected with the POS and if their branches were counted, the number went up close to 22,000 in all over the country.

The FBR has so far estimated that at least 50,000 to 100,000 shops needs to be connected with the POS and then a system would be placed whereby if any shop generated a receipt without POS, it will have to pay a penalty.

The FBR has so far placed such system at the restaurants/hotels in Islamabad Capital Territory (ICT) and this system has been running successfully.

The IMF has given the indicative target to fetch Rs50 billion through the Tajir Dost Scheme. The FBR could collect less than Rs2 million so far when nine months of the current fiscal year have already passed.

The IMF has not yet withdrawn its indicative target requirement to bring Rs50 billion from retailers so it forced the FBR to take enforcement measure without waiting for the Budget 2025-26.

This enforcement measures will be undertaken with the help of technology as geo tagging will be done to develop database for the purpose of bringing them into tax net.

The IMF has slashed down the FBR’s annual tax collection target from Rs12970 billion to Rs12332 billion for the current fiscal year. So far, the FBR has fetched over Rs8.43 trillion in the first nine months (July-March) period so they will have to move ahead with firm steps to materalise the revised target of Rs12332 billion till June 30, 2025.