Based on their shop dimensions, the Federal Board of Revenue (FBR) is contemplating introducing a fixed tax ranging from Rs1,000 to Rs5,000 monthly on 3.6 million retailers nationwide.
The tax agency plans to transition away from collecting taxes from small traders through electricity bills. Instead, they aim to introduce a consistent tax scheme tailored to city and countryside retailers.
The new proposal suggests a tax of Rs1,000 for shops measuring 100 square feet, Rs3,000 for those between 200 to 300 square feet, and Rs5,000 for spaces reaching 500 square feet in urban locales. Conversely, a flat rate of Rs1,000 is proposed for each shop in rural regions outside municipal oversight.
This strategy will allow retailers to account for this tax in their subsequent annual returns, facilitated by a simplified one-page form.
Upon reaching out to FBR Chairman Amjad Zubair Tiwana about the impending scheme, he stated, “The proposal remains under discussion. It will be presented to the finance minister once finalized.”
Yet, if approved, the interim government can enforce this without instating a new law or awaiting assembly amendments to institute this new tax structure for retailers. Existing legislation already grants FBR the authority to roll out such a scheme.
However, it remains uncertain whether the interim administration will manage potential resistance from shopkeepers upon implementing this tax or if they will reconsider their strategies for comprehensive tax inclusion.
Historical efforts to tax retailers haven’t been fruitful. A notable example is when the former finance minister Miftah Ismail’s approach to augment tax revenues via electricity bills faced severe opposition, leading to its retraction at Maryam Nawaz’s urging to heed the traders’ grievances.
 is considering a uniform tax structure for retailers based on shop size. With aims to simplify tax collection and ease retailer burdens, how will the nation respond){kind=link}