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Tajir Dost Scheme: Only 277 Retailers Pay Taxes, Despite Over 63,000 Registrations
The Tajir Dost Scheme, an initiative aimed at bringing more retailers into the formal tax net in Pakistan, has seen underwhelming participation despite a significant number of registrations. According to the latest data released by the Federal Board of Revenue (FBR), only 277 retailers have contributed a total of Rs503,632 in taxes so far. This is a stark contrast to the 63,964 retailers who have registered under the scheme.
FBR’s Efforts to Simplify Tax Compliance
In an effort to streamline tax compliance and encourage more traders to file their taxes, the FBR has introduced amendments in the Income Tax Rules, 2002. These amendments, notified under SRO 132(I) 2024, include the issuance of an electronic return form for the tax year 2024.
The new return form aims to simplify the tax filing process for retailers, particularly those who were non-filers in the previous tax year. The form will include fields for business turnover, total trading purchases, net profit, taxable income, and other financial details.
Tax Benefits for Filers
To incentivize compliance, the FBR has also announced reductions in advance tax rates for registered filers. For instance, the advance tax on purchases made by distributors, dealers, and wholesalers under Section 236G will be reduced from 2 percent (non-filer rate) to 0.1 percent (filer rate). Similarly, the advance tax on sales to retailers by manufacturers and commercial importers under Section 236H will be reduced from 2.5 percent (non-filer rate) to 0.5 percent (filer rate).
Call for Stakeholder Input
The FBR has invited stakeholders to review and comment on the draft of the new return form within seven days of its publication in the official Gazette. This is a critical opportunity for traders and other stakeholders to voice their concerns or suggestions, which the FBR will consider before finalizing the form.
The Road Ahead
Despite the low initial tax collection, the FBR’s initiatives reflect a concerted effort to enhance tax compliance among retailers. By simplifying the tax filing process and offering reduced tax rates for filers, the FBR hopes to encourage more traders to fulfill their tax obligations.
The success of the Tajir Dost Scheme will depend largely on the willingness of registered retailers to transition from registration to actual tax compliance. The coming months will reveal whether these measures can bridge the gap between registration numbers and tax payments.
