Islamabad: Finance Minister Muhammad Aurangzeb has announced that the government aims to expand the tax net to lessen the load on existing taxpayers. Addressing a joint news conference with the Minister of State for Finance, Bilal Azhar Kayani, in Islamabad, he highlighted that Pakistan's economy remained resilient despite challenges from last year's floods and the ongoing Middle East conflict.
According to Radio Pakistan, the Finance Minister stated that Pakistan managed these adversities by relying on domestic resources without seeking foreign aid. He stressed the necessity of broadening the tax base to enhance revenue generation and introduced a fixed tax scheme for small traders and retailers as part of this effort.
Bilal Azhar Kayani detailed that the scheme entails a fixed tax rate of one percent, with any previously deducted withholding tax being adjustable. The minimum tax under this initiative is set at 25,000 rupees, with businesses having higher turnovers paying one percent based on their sales volume.
Kayani further elaborated that the fixed tax scheme was crafted in collaboration with small traders and retailers and targets those with annual turnovers up to 200 million rupees. Participants of the scheme will be exempt from using POS machines. Instead, a plaque with a QR code will be installed at shops for FBR officials to verify taxpayer status.
A single-page form for the scheme, available in Urdu and regional languages, will be submitted by those opting into the scheme alongside a minimum payment of 25,000 rupees. Traders who opt not to participate can remain as general taxpayers, with any withholding tax already deducted being adjustable.
Kayani also mentioned that participants of the fixed tax scheme will be exempt from general audits, with a committee formed to address any audit concerns. Both non-filers and existing filers can join the scheme, provided they meet the turnover criteria of 200 million rupees or less over the past three years.
For those who neither file returns under the fixed tax scheme nor become filers through the general tax regime, penalties will be imposed-10,000 rupees in the first month, 25,000 in the second, and 50,000 in the third month.