ISLAMABAD: The Federal Board of Revenue (FBR) has issued the procedure for a fixed tax scheme for small traders, under which owners of a single shop with an annual turnover of up to Rs200 million will be able to avail the facility.
According to a notification issued by the FBR, a one per cent tax on total turnover has been proposed under the scheme. The government expects to generate more than Rs50 billion in annual revenue if the scheme is successful.
The FBR said the scheme would be voluntary and shopkeepers would have the option to file a regular income tax return as well. A minimum tax payment of Rs25,000 in cash will be mandatory.
Owners of more than one shop will not be eligible for the scheme. Tier-I retailers, jewellers and providers of professional services have also been excluded from its purview.
The FBR has invited objections and suggestions on the draft within seven days. Registration can be done through the IRIS portal, the mobile app or the nearest tax office. Under the proposed scheme, eligible shopkeepers will be issued a “Green Plate”.
According to the notification, FBR officers will not enter shops displaying the Green Plate for tax-related matters. Small traders included in the scheme will not be required to install a Point of Sale (POS) machine and will also be exempted from tax audit.
Under the notification, traders will be required to provide details of net profit, income from other sources and total tax paid. Furnishing details of immovable property, bank balances and cash in hand in the form has been made mandatory, while small traders will also have to share details of other assets with the FBR.
For registration of small traders, the FBR has also introduced a simplified one-page tax return form, which will require the business name, address, Computerized National Identity Card (CNIC) number and nature of business. Annual sales, purchases and business expenses will also have to be declared.
The FBR said an audit would be conducted in case of unusual business activity or purchase of high-value assets. Action will be taken in case of misuse of the scheme or concealment of information to evade tax payment, and for this purpose, the FBR has been authorized to act on information received from third-party sources.
