ISLAMABAD: The Federal Board of Revenue (FBR) has drafted a very simple tax payment system for traders, shopkeepers and retailers with market/area-wise flat rate of tax (annual/monthly) based on the locality of shops/outlets in 42 cities of the country.
In this regard, the FBR has drafted valuation tables of markets in 42 cities with indicative income, estimated annual tax on such income and monthly tax installment for traders, shopkeepers and retailers.
The concept of tax payment on square feet basis has been ended and flat rate of tax has been proposed by the FBR on the basis of area. The FBR will not work out shop areas based on immovable properties valuation tables, but a simple flat rate system for the small traders.
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The markets have been divided into three categories i.e. high-end shops located in prime/posh locations, medium size shops and small shops located in low localities or areas. Higher tax has been proposed for big shops, comparatively less tax on medium-size shops and very low tax for small shops.
The FBR has drafted the lists and shared them with the traders’ representatives under the consultative process for finalising a tax payment scheme.
On Friday (July 12), the Regional Tax Offices and representatives of traders in 42 cities would hold meeting to discuss the FBR’s draft calculations of indicative income and estimated amount of monthly tax installment to be paid by traders. For instance, if the indicative income of a trader in a market has been calculated at Rs600,000 per annum. The annual tax would be Rs1,200 and a monthly tax of Rs100.
In other areas, monthly tax has been proposed at Rs2,000 per shop which goes up to Rs50,000 per shop in posh localities.
The traders’ representatives and the tax officials of the RTOs would discuss the draft of the valuation tables and finalise their recommendations to the Board.
It is expected that the FBR will issue the final notifications by Monday next week, sources added.
Copyright Business Recorder, 2024