The Federal Board of Revenue (FBR) has introduced a simplified tax scheme aimed at taxing the estimated incomes of traders, retailers, and specified individuals, as part of an effort to reduce the informal economy’s size.
The FBR expects this new scheme to potentially generate income tax revenue ranging from Rs400 billion to Rs500 billion.
The scheme’s details were presented to the federal cabinet for endorsement, to calculate the estimated income of traders and retailers.
The proposal takes into account factors such as shop location, value, and rent to determine indicative incomes. To facilitate this process, a specialized mobile application named ‘Tajir Dost’ has been developed to streamline income calculation and tax collection.
Under this scheme, indicative income will be determined based on a rate three times the rental value, considering the general ratio of rent expenses to income.
Tax payments will be made in 12 monthly installments, with a 50% discount offered to proactive individuals who file tax returns before the first monthly installment.
Additionally, the minimum tax can be adjusted based on self-declaration in the annual return, encouraging timely tax filing.
The goal of this initiative is to bring the remaining 3.2 million retailers, primarily located in major cities, into the tax net, expanding the tax base and revenue collection.
Currently, only 300,000 out of an estimated 3.5 million retailers actively file tax returns.
In addition to this tax scheme, the FBR is finalizing the digitization of withholding tax collection through the Synchronised Withholding Administration and Payment System (SWAPS).
FBR is only good for bluffing, it is another crumbling institution in the banana Republic.
Totally 😁 Rubbish as the
Federal Board of Revenue is the most corrupt institution in Pakistan,
and oversized employees at presently 23,000
while actual requirements is just 5,000 employees