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FBR decides to tax retailers of five big cities

A shopkeeper sits at a grocery store. —Reuters/File
  • In first phase, retailers to be taxed in the four provincial capitals.
  • Tax to be imposed on businesspersons associated with any sector.
  • Tax collection authority has prepared a scheme for taxing retailers. 

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to impose a tax on retailers in five big cities of the country including Karachi, Islamabad, Lahore, Peshawar, and Quetta, Geo News reported, citing sources on Thursday.

The sources said Rs100 billion in revenue would be generated through imposing a tax on 3.5 million retailers in those cities and for that purpose, the board had prepared a scheme.

“In the first phase, retailers will be taxed in the four provincial capitals and the federal capital,” they said.

They said the taxation would be based on the size of the shop and the volume of its annual income and it would be collected every month.

The sources said the scheme was completely ready and they would launch it upon getting the green light from the government. 

At least 10% advance tax would be charged on retailers’ annual income, they said adding that under the scheme the tax would be imposed on businesspersons associated with any sector.

The News reported last month that after the International Monetary Fund’s (IMF) rejection of introducing any fixed scheme for retailers, the caretaker government had finalised the ‘Tax Asaan Application’ for collecting tax from small shopkeepers based on the valuation of each shop determined by the FBR.

Official sources had confirmed that the retailers’ scheme was almost finalised and now the caretaker government would grant permission to launch this scheme before the completion of its stipulated timeframe.

In the past, every scheme to bring millions of retailers into the tax net met with failure.

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