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Attention all retailers and wholesalers doing business in Pakistan!

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Attention all retailers and wholesalers doing business in Pakistan! The government has announced a compulsory tax registration scheme for traders, and it’s time to take action. This move marks the first test case of the ruling party’s political will to expand the narrow tax base, and it’s imperative that you step up and contribute your fair share.

The scheme, named “Special Procedures for Small Traders and Shopkeepers,” has been expanded to include dealers, retailers, manufacturer-cum-retailers, importer-cum-retailers, or any person involved in the supply chain of goods. It’s time to bring everyone into the tax net and ensure that no one slips through the cracks.

Karachi, Lahore, Islamabad, Rawalpindi, Quetta, and Peshawar, which are major trade hubs in Pakistan, have been chosen for the scheme. The Federal Board of Revenue (FBR) has issued the statutory regulatory order to implement the new scheme from April 1, 2024, and there’s no room for delay.

The salaried class in Pakistan has been the fourth-largest income tax contributor during the first eight months of this fiscal year, paying Rs217 billion in income tax, whereas retailers paid a mere Rs11.2 billion in the same period. As a trader, you need to step up and contribute your fair share to the economy. With the implementation of the new scheme, every trader is liable to pay monthly advance tax on the 15th of each month. Even if your income is below the income tax threshold, you must pay a minimum of Rs1,200 per annum income tax.

Traders and wholesalers have been given one month by the FBR, expiring on April 30th, to register. In case of failure to register, the FBR will force registration in its National Business Registry. The fair market value will be calculated based on the valuation of immovable properties notified by the FBR, and over 80% of bank accounts that are not visible to FBR authorities, many of which are operated by these traders, will now be accounted for.

The scheme is launched for registration and payment of minimum advance income tax, effective from April 1st, and traders will make their first tax payments on July 15th, according to the notification. The Special Investment Facilitation Council (SIFC) will monitor the progress of compulsory registration scheme for retailers, and a central repository database of traders and shopkeepers will be accessible through a Tajir Dost module tax application or the FBR’s portal for registration and advance income tax payment.

It’s time to take responsibility and contribute your fair share to the economy. Register now and make your first tax payment on July 15th, 2024. Failure to comply with the new scheme will not be tolerated, and the FBR will take strict action against those who fail to register or pay their taxes. Let’s work together to create a fair and prosperous Pakistan. 

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