KARACHI: Leaders representing traders and retailers have said the delay in issuance of notification for the removal of fixed sales tax of Rs6,000 in electricity bills is creating a lot of problems for small businesses.

They said some traders fearing power disconnection had paid the bill in June even though the sales tax collection through electricity bills was targeted to be collected from July.

Many traders had not paid the bill at the request of trade bodies which showed strong resistance towards the imposition of fixed sales tax in power bills forcing the government to withdraw it.

Markeze Anjuman-e-Tajiran Pakistan President Kashif Chaudhry told Dawn from Lahore on Thursday that the Federal Board of Revenue (FBR) on Aug 5 issued minutes of Aug 4 meeting presided over by Finance Minister Miftah Ismail in which various decisions regarding sales tax collection through electricity bills were taken.

He was of the view that the decisions included in the minutes of the meeting were enough instead of issuing any notification or any SRO.

However, he urged the government to issue instructions or any circular to the banks to accept the power bills without the sales tax and also delete the late surcharge fees as 70-80pc traders have not paid their bills due to countrywide protest.

The meeting decided that the fixed tax scheme introduced through Finance Act 2022 would be rolled back ab initio and the retailers would continue to pay taxes as per the previous mechanism and rates.

The previous tax rates would continue to apply to retailers from July 1 to September. The government would review the situation and would notify new tax rates effective from Oct 1. For reversal of the fixed tax scheme, necessary legislation would be enacted by the FBR as soon as possible, the minutes said.

All City Tajir Itehaad Association General Secretary M. Ahmed Shamsi said the finance minister on Aug 5 announced the removal of the Rs6,000 sales tax and assured the trade bodies that he would call upon KE head of billing in Karachi on Aug 6 to issue new bills without sales tax besides extending the due date by eight to 10 days.

Supreme Council of Traders chief Imran Baghpati asked the government to evolve a mechanism to refund Rs6,000 sales tax to all those who had paid their June bills.

Published in Dawn, August 12th, 2022