ISLAMABAD: The government has estimated to collect nearly Rs500 billion from the new simplified scheme for registration of traders and retailers.

Under the proposed scheme, the FBR will allow traders and retailers to deposit payable tax in 12 monthly installments under the new simplified scheme.

Sources told Business Recorder that the contribution of the retail and wholesale sector in the gross domestic product (GDP) is 18 percent while the contribution in taxes is four percent. The proper taxation system for this segment will foster documentation and reduce the size of Pakistan’s informal economy.

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Until a proper digital tax system is institutionalized, the FBR chairman has proposed a simplified scheme to determine indicative income of traders, the sources maintained.

The scheme has been based on the location, value and rent of shops. In this regard, the Mobile App “Tajir Dost” would calculate the income and tax of the traders. The indicative income to be calculated and the rental value based on general ratio of rent expense to income. The tax is payable in 12 monthly installments.

The 50 per cent discount would be available for those retailers who file returns for the tax year 2023 before the first monthly installment. The minimum tax adjustable against the self-declaration in annual income tax return.

Copyright Business Recorder, 2024