ISLAMABAD: The Federal Board of Revenue (FBR) is thinking about introducing a fixed monthly FBR tax for around 3.6 million retailers across the country based on the size of their shops.

According to the report, the tax collection authority has come up with a plan where they would stop collecting taxes from small traders and shopkeepers through electricity bills. Instead, they would implement new fixed tax schemes for both urban and rural areas.

FBR tax details

Under this proposed plan, they are considering imposing a FBR tax of Rs1,000 for shops sized 100 square feet, Rs3,000 for shops sized 200 to 300 square feet, and Rs5,000 for shops sized 500 square feet in urban areas. For rural areas outside municipal committees’ jurisdiction, a fixed rate of Rs1,000 per shop is being considered.

Retailers would have the option to include the paid tax in their next year’s tax return. There will be a simple one-page form to apply for this fixed tax scheme.

FBR Chairman Amjad Zubair Tiwana, when asked about the plan, stated, “No proposal has been finalized yet. Once the proposal is finalized by the FBR, it will be shared with the finance minister.”

However, if the plan is approved, the caretaker government won’t need to pass new laws or wait for the new assemblies to impose this fixed tax scheme for retailers. The FBR has the authority, under existing parliamentary-approved laws, to introduce such a scheme for retailers.

It remains uncertain how the caretaker government will handle the reaction of shopkeepers when implementing the FBR tax or whether they will reconsider the plan, given past challenges in bringing retailers into the tax system. A previous attempt to increase tax collection through electricity bills faced significant backlash and was eventually withdrawn following concerns raised by traders, including Maryam Nawaz.

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