ISLAMABAD: The Federal Board of Revenue (FBR) has expanded its Tajir Dost Scheme to include 36 new cities, aiming to bring traders and wholesalers into the formal tax structure as required by the IMF.

Since April 1, tax authorities have registered over 40,000 traders under the scheme in six cities: Karachi, Lahore, Islamabad, Peshawar, Quetta and Rawalpindi. The registration scope has now been widened to cover more cities.

FBR Chairman Zubair Tiwana told Dawn that negotiations with trader representatives are ongoing to finalise the tax system for retailers by the end of the month. “We will try to finalise the tax scheme this month after receiving feedback from traders,” he said.

The IMF has urged the FBR to implement the tax structure for retailers starting in July. Mr Tiwana said the FBR would consider the traders’ justified demands. “We have already shared the tax scheme with traders,” he said, adding that taxes would be collected in instalments based on indicative incomes.

Traders have opposed the special tax regime and have vowed to resist shopkeeper registration. A video of a trader confronting the FBR chairman at a meeting went viral on social media, showing resistance from shopkeepers.

Tax authorities have registered over 40,000 traders in six cities since April 1

Meanwhile, Naeem Mir, chief coordinator of the Tajir Dost Scheme, said consultations with traders were ongoing. Mr Mir, nominated by the FBR, will coordinate with tax officers to implement the plan.

He said taxes would be collected from traders across all districts and would be adjustable. He said tax rates would be announced in a table for advance tax, considering the nature of the locations, whether affluent or backward, to ensure equity.

Tax officers from 17 regional tax offices have approached trade representatives from 42 cities via video link to determine advance tax rates. Mr Mir said some 85pc of traders have agreed on the table rates for advance tax collection.

Published in Dawn, July 13th, 2024