The government has expanded the scope of the Tajir Dost Scheme, an initiative to incorporate the retailers into the tax net, to include shops in residential areas.
The decision to extend the scheme, which now covers 100-square-foot shops previously exempt from the fixed income tax of Rs100 to Rs60,000 per month, was made to address IMF concerns regarding the narrow base of the scheme.
According to a report by the Express Tribune, the changes were quietly made through amendments to the Tajir Dost Special Procedure notification, but the government has not publicly released the revised notification to avoid backlash from traders and political groups, particularly the Jamaat-e-Islami, who have opposed the scheme.
A senior official from the Federal Board of Revenue (FBR) confirmed that the scheme now includes traders operating in residential areas, but the government plans to reveal the changes at a politically opportune time.
The government implemented the new traders’ scheme last month, targeting Rs50 billion in revenue for the fiscal year 2024-25. However, exclusions such as 100-square-foot shops and the Rs100 fixed rate on 50-square-foot commercial area shops have made it difficult for the FBR to meet this target. As of now, only 62 traders have registered under the scheme, contributing a mere Rs115,000 towards the ambitious Rs50 billion target.
This expansion of the scheme highlights the government’s struggle to implement crucial economic decisions amidst a challenging political landscape.
The development comes as concerns grow over the IMF Executive Board’s approval of the bailout package, with the board’s schedule not yet listing Pakistan’s case for review.
