FBR to overhauls Tajir Dost Scheme, shifts focus to large retailers

The Federal Board of Revenue (FBR) has announced significant changes to the Tajir Dost Scheme, which registers shopkeepers and retailers across Pakistan. 

As per media reports, the new approach aligns with an FBR commitment to the International Monetary Fund (IMF) to generate Rs 50 billion in revenue through the Tajir Dost Scheme by the end of the fiscal year. 

The first-quarter target of Rs 10 billion was not met, with the FBR reporting only Rs1.7 million in tax collected under the scheme so far.

Under the revised framework, the FBR will target large retailers and shopkeepers based on financial data analysis, tax returns, and commercial electricity usage, moving away from the previous fixed tax per shop model.

A key change is that larger retailers will be registered based on reliable data indicating tax evasion, rather than physical surveys of individual shops. 

This adjustment also removes the need for door-to-door market surveys and the collection of a flat tax rate from every shop, regardless of size. 

The revised scheme is focused on areas with greater revenue potential, such as wholesale markets and upscale retail zones, according to FBR officials.

However, the IMF’s endorsement of these changes remains in question, especially as the initial fixed tax model did not yield the anticipated revenue.

In light of these modifications, the FBR will now suspend the registration of small traders, choosing instead to pursue high-value retail markets based on data from tax returns and commercial power meters.