The Federal Board of Revenue (FBR) has introduced a new software tool aimed at facilitating the taxation process for retailers within the framework of the upcoming documentation scheme for retail outlets across Pakistan.
While the official notification for the new scheme is pending, preparations are underway to implement it nationwide. The FBR emphasizes the importance of a robust technical infrastructure to effectively tax retailers, leveraging IT systems and integrating small retailers into the scheme.
Initially targeting major cities, including Karachi, Lahore, Islamabad, Peshawar, and Quetta, the FBR aims to document approximately 3.5 million retailers. The new scheme holds the potential to generate significant revenue, estimated to be around Rs 100-200 billion.
The documentation process will kick off in the federal capital and the four provincial capitals during the first phase. The FBR’s revenue target from the documentation of retailers is set at Rs 100-150 billion, taking into account factors such as shop size and annual income.
To assess the tax potential of retailers, the FBR plans to utilize indicative income based on shop locations and rental payments. The implementation of legal powers under section 99B of the Income Tax Ordinance 2001 is proposed, allowing the Finance Minister to impose taxes through an official Gazette notification.
Under section 99B, the Finance Minister, with the approval of the Minister in-charge, can prescribe special procedures for the scope and payment of tax, filing of returns, and assessment for small traders and shopkeepers in specified cities or territories.
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