Wednesday, June 19, 2024

FBR Plans Nationwide Retailers Tax; Expected to Boost Revenue by Rs100 Billion

The Federal Bureau of Revenue (FBR) is set to implement a nationwide retailers tax, beginning with a phased approach in five major cities of Pakistan. Sources within the FBR reveal that Karachi, Lahore, Islamabad, Peshawar, and Quetta are slated for the first phase, pending approval from the federal government.

The comprehensive scheme, devised by the FBR, targets the inclusion of approximately 3.5 million retailers across Pakistan. The anticipated impact of this initiative is a significant boost in revenue, with an estimated additional Rs300 billion expected to be generated. The initial phase aims to enhance revenue collection by Rs100 billion, factoring in the size and annual income of each establishment.

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Under the proposed scheme, tax collection will be a monthly occurrence, with a 10% advance tax calculated based on the annual income imposed on retailers. This tax applies to all businesses and individuals engaged in various forms of retailing.

The move comes as a response to the longstanding absence of the retail sector, along with real estate, agriculture, and professionals, from the tax net, contributing to Pakistan's notably low tax-to-GDP ratio. The corporate sector, salaried classes, and international financial institutions such as the World Bank and the International Monetary Fund (IMF) have consistently urged Islamabad to broaden the tax base for improved revenue collection.

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Zain is a dynamic business student with a passion for technology that goes beyond the classroom. When he's not immersed in his studies, Zain can be found playing with the latest gadgets, fueled by a genuine curiosity for emerging tech trends. His love for technology extends to his avid reading habits, where he stays updated on the latest advancements and breakthroughs in the tech world. Despite his academic focus, Zain is also an outdoor enthusiast, always ready for an adventure. With several years of experience in writing news, Zain brings a unique blend of business acumen, tech-savviness, and journalistic expertise to any discussion or project.
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