Tajir Dost Scheme registers 58,000 traders; Rs40 billion revenue target faces shortfall

The Federal Board of Revenue (FBR) has so far registered over 58,000 small traders and shopkeepers under the Tajir Dost Scheme, a shortfall from the target of 3.2 million. 

The scheme aims to bring a large number of small businesses into the tax net, with the FBR projecting a total collection of Rs40 billion for the current fiscal year.

Monthly tax payments from traders under the scheme are set to begin this month (August). 

FBR has outlined a monthly advance income tax plan for traders in 42 cities across the country. These cities include major urban centers such as Karachi, Lahore, Islamabad, and Peshawar, as well as smaller cities like Bahawalnagar, Mansehra, and Gwadar.

The FBR has issued location-specific guidelines for indicative income, income tax, and monthly advance tax payments. The majority of traders (78%) will be required to pay a monthly advance income tax of Rs5,000. In other areas, the tax ranges from Rs10,000 to Rs60,000 per month, depending on the market location.

Despite the FBR’s efforts, the newly appointed Chairman of the FBR, Rashid Mahmood Langrial, has expressed concerns over the ambitious target of collecting Rs40 billion from traders this fiscal year. 

During a high-level meeting chaired by Finance Minister Muhammad Aurangzeb at the FBR headquarters on Monday, Langrial questioned the feasibility of this target, especially considering that the scheme only generated Rs 4 billion in the previous fiscal year (FY24).