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Govt announces fixed-tax exemption for small retailers

Cannot afford subsidies on petroleum due to IMF conditions: Miftah Ismail

ISLAMABAD: Finance Minister Miftah Ismail has announced an exemption from the fixed tax for small retailers and shopowners using fewer than 150 units of electricity a month.

The minister announced the measure at a press conference in Islamabad and later elaborated it in a series of tweets after receiving a phone call from Prime Minister Shehbaz Sharif and a request from PML-N leader Maryam Nawaz Sharif.

“The Prime Minister has called me and instructed me to ensure that small traders are completely satisfied with the new tax law. This I shall do tomorrow,” tweeted the minister.

 

The finance minister said that to address the concerns of the small retailers the government will “exempt shops with bills of less than 150 units” from the tax.

“We will charge Rs3,000 even to those shopkeepers who are not registered with the Federal Board of Revenue (FBR). The tax paid will be full and final. No tax notice will be issued to shops nor will FBR officers visit their shops,” tweeted the finance minister.

Ismail was responding to a tweet by PML-N leader Maryam Nawaz Sharif who had asked him to “withdraw tax on electricity bill” as the businessmen were worried and complaining.

Soon after the tweet, Maryam said that she had spoken to the finance minister who had assured him that he would sit with the traders tomorrow (Monday) and find a solution.

The government in the budget for the current fiscal year had decided to deduct tax through electricity bills from small shopkeepers or retailers across the country to bring the sector under the tax net.

The budget document showed that fixed income and sales tax regimes of Rs3,000 to Rs10,000 has been imposed on the small retailers to bring them into the tax net.

However, traders across the country have staged protests and refused to pay the tax after even the small shopowners received bills with Rs6,000 in tax dues.

Miftah Ismail announced that retailers who use 100 or 150 units or below, especially small neighborhood shops, will be exempted from the tax.

He urged retailers to get registered on the Active Taxpayer List, adding that everyone will have to pay the tax.

He also clarified that the government will charge only Rs3,000 even if a retailer is not a filer. However, at the press conference, Miftah also announced a new tax that will apply from the next fiscal year.

He said manufacturing companies that fail to export at least 10% of their produce, will have to pay 5% additional tax to encourage exports.

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