ISLAMABAD: As the clock ticks down to the Sept 30 deadline, the Federal Board of Revenue (FBR) on Thursday sent an offer of talks to representatives of the trade bodies on Friday to settle all issues ranging from big retailers sales tax registration, CNIC condition and fixed tax regime for small shopkeepers.

The olive branch came to the traders from FBR Chairman Shabbar Zaidi amid reports that some factions of traders across the country are planning to organise a protest in Islamabad on Oct 9 especially against implementation of the CNIC condition.

The FBR had delayed implementation of this decision till Sept 30 to try and win over the trader bodies, but those talks broke down 10 days ago.

“We are open to talks on all these issues,” FBR chairman told Dawn, adding in case of positive talks, the date can be extended further for implementation of the CNIC condition. Zaidi is positive that the issue will be settled, adding he is not worried about the talks.

“We have extended invitation to all trade representatives for talks”, he said, adding FBR’s doors are open for them.

CNIC condition implementation to begin from Sept 30; traders divided, many deny receiving any invitation for talks

One member of the country’s myriad trade bodies confirmed to Dawn that he received a request from the FBR to come in and talk on Friday while others denied having received any such message.

Naeem Mir of All Pakistan Anjuman-i-Tajiran, based out of Lahore, said he received a request two days ago, but added that he had refused the request. “We have rejected the meeting because we see no serious interest, whether FBR Chairman Shabbar Zaidi or other senior officials, will hold the dialogue on Friday.”

He said he had been meeting with the FBR team for the last two months but so far, nothing concrete has emerged despite deliberating on traders’ proposals.

“[The] FBR has wasted our time. It listens to our proposals and suggestions but could not practically implement any of them,” he said adding that the FBR has so far literally failed in providing any relief to the traders.

A number of Karachi-based associations have planned a sit in at Motondas Mustafa Cloth Market Alam Chowk at M. A. Jinnah Road on Sept 27 (Friday) at 1.30pm after talks failed between the FBR and trade bodies over the budgetary measures and fixed tax system.

Likewise, Markazi Tanzeem Tajiran Pakistan Chairman Kashif Chaudhry said he has not received any call or invitation from the FBR for a Friday meeting. He said, “we are all on same page for a sit in at the FBR House on Oct 7.”

All Karachi Tajir Ittehad Chairman Atiq Mir also denied receiving any such request. His body has also announced to support the Friday sit in as well.

On the other hand, traders group remains divided over the response to the proposed schemes. “We have received requests from almost 32 associations for inclusion in talks,” an official of the FBR said.

On Aug 2, FBR notified three draft schemes including simplified tax regime for traders, fixed tax regime for small shopkeepers and issuance of business licences to bring the undocumented sectors under the tax net. Since then, the trader bodies have been opposing these schemes, even launching a countrywide shutterdown strike in one case.

The FBR has a plan to bring into the tax net only big wholesalers and distributors. “Our focus is only on big retailers” one official said speaking on background, adding this is not an issue of all traders. “We don’t see any problem on sales tax registration of big retailers,” the official said.

Moreover, the FBR official said he did not see any deadlock on the issue of fixed tax regime for small shopkeepers as well.

Giving an example of sugar, the official said that around 6 to 8 million tonnes of sugar was produced in the country last year, which was sold to consumers at around Rs500 billion. Despite this massive volume, the FBR has only collected Rs15bn from the sector. At the rate of 17 per cent sales tax, the revenue collection should have been Rs85bn leaving a big margin of evasion.

The official said the FBR has no other option but to pursue its policies of achieving the revenue collection target of Rs5.5trillion projected for the current fiscal year under the International Monetary Fund programme.

Published in Dawn, September 27th, 2019