FM Aurangzeb says govt introducing fixed tax scheme for small shop owners

Finance Minister Muhammad Aurangzeb has said that economy performed well in the current fiscal year despite tension in the Middle East, reported 24NewsHD TV Channel.

Addressing a news conference along with Bilal Azhar Kayani, State Minister for Finance, FM Aurangzeb said that Federal Bureau of Revenue (FBR) was committed to rationalize tax system and tried its best to ease pressure on tax payers.

He said both non-filers and filers can enter the scheme. Filers will be able to opt for the scheme under the condition that, in the past three years, the business’ turnover must not exceed Rs200m, he said. He further stated that kiosks are exempt from the scheme. 

The finance minister said the scheme was being presented for three to four million shop owners in line with their demands and after holding consultations with local shop associations.

The FBR official speaking at the press briefing maintained that this is not a tax amnesty scheme but rather a tax facilitation scheme.

Finance Minister Muhammad Aurangzeb said the government was introducing a fixed tax scheme for small shop owners. The scheme, aimed at businesses with annual earnings of less than Rs20 million, would facilitate their inclusion in the tax net.

He said FBR was launching Fixed Tax Scheme after due consultations with the stake holders. He said that tax ratio will be decreased and rationalized.

Outlining details of the scheme, Bilal Azhar Kayani said that the scheme carries a fixed tax rate of one percent, while any withholding tax already deducted will be adjusted against it.

He added that the minimum tax payment under the scheme would be 25,000 rupees, while businesses with higher turnover would pay tax at one percent according to their sales volume.

Bilal Azhar Kayani said that an optional fixed tax scheme has been introduced in consultation with small traders and retailers. The scheme is meant for traders with an annual turnover of up to 200 million rupees. Shop owners in the fixed tax scheme will be exempted from using POS (point of sale) machines.

The Minister of State said that a plaque with a QR code will be fixed at shops, which will be scanned by FBR officials to verify the taxpayer status of the particular shop.

He added that a single-page form has been introduced for small traders and retailers, which will be available in Urdu as well as regional languages. He said that those who want to benefit from the fixed tax scheme will submit the form along with a minimum payment of 25,000 rupees.

He added that traders who do not want to benefit from the fixed tax scheme can remain general taxpayers. He also mentioned that already deducted withholding tax will be adjustable.

Bilal Azhar Kayani said that retailers and small traders in the fixed tax scheme will be exempted from general audits, and a committee will be formed to handle any audit-related issues. He said that non-filers as well as existing filers are eligible to join the fixed tax scheme.

He said that those traders who are filers and want to join the fixed tax scheme should have a turnover of 200 million rupees or less during the previous three years. He said that those who will neither file return under the fixed tax scheme nor become filer through general tax regime will be fined with 10,000 rupees in first month, 25,000 rupees in second month and 50,000 rupees in the third month.