Retailers’ tax scheme fails; action planned against non-filers

ISLAMABAD: The government is facing difficulties in bringing retailers into the tax net. So far, only 1,750 shopkeepers have benefited from the new simplified registration scheme, while only 220 new shopkeepers have joined the tax net through the retailers’ scheme.

According to sources, the government had set a target of collecting Rs50 billion from the retailers’ tax scheme. The FBR has identified 3.6 million potential non-filers in the country’s retail sector.

Action against non-filers

The FBR plans to geo-tag markets to bring retailers into the tax net. According to sources, shopkeepers who do not join the tax net may be fined. Non-filers will be fined Rs10,000 in the first month and Rs25,000 in the second month. In the third month, the fine may go up to Rs50,000. The FBR also has the power to seal the shops of those who do not join the tax net.

It may be recalled that the deadline for filing income tax returns was extended twice. By October, the FBR had received 7.6 million income tax returns.

Tax collection in October

According to sources, the FBR faces a shortfall of Rs157 billion against the target for tax collection in October. In the first 30 days of October, the FBR collected Rs975 billion in tax revenue, against a monthly target of Rs1,132 billion.

In the first four months of the fiscal year, from July to October, a total of Rs4,058.5 billion in tax was collected, against a target of Rs4,185 billion for the period. Thus, four-month tax collection also fell short of the target by Rs126.5 billion.