Direct Tax Plan for Retailors Implemented by FBR

Islamabad: The Federal Board of Revenue (FBR) is introducing a simple tax plan targeted at the retail industry as part of its attempts to encourage more companies to join the formal economy and reduce the size of the unorganized sector.

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The FBR intends to streamline tax procedures for merchants, retailers, and particular persons, making it simpler to estimate their profits, as the information disclosed. This program is expected to result in an increase in income tax revenue of between PKR 400 billion and PKR 500 billion.

The planned scheme’s details were given to the federal cabinet, awaiting endorsement. According to a senior tax official, this program aims to expedite the evaluation of dealers and retailers.

While the retail and wholesale sector makes up a large share of the GDP (18%), its tax contribution is still disproportionately low at just 4%. The government has been steadfastly trying to incorporate this industry into the tax system better since it realized this gap. Nevertheless, prior attempts have not produced the intended results.