Will Pakistani retailers face fixed tax on the basis of outlet size?
Business
Will Pakistani retailers face fixed tax on the basis of outlet size?
LAHORE (Web Desk) – In a bid to bring all the retailers under the tax net, the Federal Board of Revenue (FBR) is mulling over a plan to impose a fixed tax on around 3.6 million retailers in the country based on the size of their outlets and shops.
According to a report by a private media outlet, this monthly tax may range between Rs1,000 and Rs5,000 depending on the size of the retail store.
The FBR will, under the proposed plan, announce fresh schemes for the retailers both in urban and rural centres of the country, and will abolish taxation through electricity bills.
The report adds that in the urban areas, the FBR is considering levying a tax of Rs1,000 on a shop or outlet sizing 100 square feet, Rs3,000 on a shop sizing 200 to 300 square feet and Rs5,000 on a shop or outlet sizing 500 square feet.
For the rural centres falling outside the jurisdiction of municipal committees, the proposal is to impose a fixed tax of Rs1,000 on each shop.
The report discloses that under this scheme, the FBR may allow the retailers to incorporate this new tax into their paid tax return at the time of yearly filing.
According to the media outlet, FBR Chairman Amjad Zubair Tiwana, when contacted for comments about the new taxation plan, said that the proposal was yet to be finalised by the FBR, after which it would be shared with the finance minister.
It is important to note here that if the plan is greenlighted, it will not require any new law enactment for the imposition of a fresh fixed tax scheme for the retailers, since the FBR is mandated to introduce such schemes for the retailers.
Since FBR attempts to bring the retailers under the tax net miserably failed last time under former finance minister Miftah Ismail, it is unclear how the caretaker government will act in the event of pressure from the retailers and shopkeepers when the new taxation schemes are implemented.
