The Federal Board of Revenue (FBR) has so far appeared feeble to bring retail sector into tax net, despite issuing over 5500 notices; it was learnt here on Monday. According to sources, although the FBR is keen to go all out to bring retail sector into tax net, the tax authority has so far not received a stirring response against its efforts.
They said that chairman FBR Tariq Bajwa during a recent visit to Karachi directed all three regional tax offices to take all possible measures to bring retailers into tax system. Sources said that tax offices had also been asked to submit a progress report to Islamabad on a regular basis. The sources further said that tax offices in Karachi on the directives of the chairman FBR, had started serving notices on retailers, offering them to get their businesses registered with the tax department, if not, punitive measures would be taken against them.
When contacted, official sources on a condition of anonymity said that tax offices had so far received a lackluster response from retail sector, despite serving hundreds of notices on them. They said that international and domestic retail chains, which were supposed to be tax compliant, were also showing reluctance to get their businesses enrolled with the tax department.
They said that no response had been received so far from international and domestic retail chains against the notices. Replying to a question, they disparaged Islamabad for its approach, saying that field formation could not yield fruits from retail sector in Pakistan. They lauded the initiative taken by the government in recent budget to link sales tax with electricity consumption, saying that it would generate substantial revenue for the department.
They said that the department instead of making efforts for collecting sales tax from retail sector, directly, should adopt similar approach to achieve its goal. Moreover, they said that the FBR should not only take other utilities on board for the purpose but also introduce special incentives to attract retail sector for tax registration.