ISLAMABAD: Traders have rejected the new policy of the Federal Board of Revenue (FBR) on sales tax and demanded reintroduction of the self-assessment system which was started during former prime minister Shaukat Aziz’s tenure.

President Traders Welfare Association Super Market Sarfraz Mughal while talking to Dawn said the FBR had issued a Statutory Regulatory Order (SRO) 608 without taking the traders’ community into confidence.

“Through the SRO a new criterion for the collection of sale tax has been introduced. All those traders who have credit card machines, air conditioners in shops or have been paying over Rs50,000 in electricity bills cannot be considered as small traders,” he said.

“Nowadays even retailers have credit card machines because credit cards have become a status symbol and people do not want to pay their bills in cash. Moreover, because of overbilling traders have received power bills of over Rs50,000,” he said.

“The new criterion for collection of sales tax has put most traders in trouble because they have received notices of sales tax beyond their expectations,” he said.

Trader leader Ghulam Hassan Butt said because of the sit-ins in the capital, businesses had decreased by 50 to 60 per cent.

“Sales tax notices have added to the tension of the traders because they are not in a position to pay taxes. Traders are confused over the formula of imposing the tax,” he said.

Another trader, Aminur Rehman, said the government should take trader leaders and chambers of commerce into confidence and for the time being, implementation of the SRO should be postponed if it cannot be withdrawn.

“The government should facilitate those who have already been paying tax and make efforts to bring more people into the tax net instead of putting burden on those who are already paying taxes,” he said.

Trader leader Niaz Abbasi said every day a number of traders contact him and ask about the notices.

“I am not in a position to say anything to them because FBR is not clearing the situation. Small traders are scared about the future of their businesses because they cannot afford to pay huge taxes,” he said.

Sarfraz Mughal said in the self-assessment system a formula was introduced that if a trader paid 20 per cent more tax compared to last year’s he would be exempted from tax audit.

“Because of that decision, taxes on traders were increased by 100 per cent in the next five years. If a new scheme would be introduced under which if a trader pays 25 per cent more tax compared to last year’s he will not face audit. It will be in the benefit of both traders and government,” he said.

Published in Dawn, October 21st , 2014