Fixed tax scheme; traders welcome move, stress easy, effective implementation

RAWALPINDI, Jun 06 (APP): Traders and businesses communities have welcomed the government move regarding fix tax scheme for small scaled trades in and stressed the need for cautious and effective implementation. Government has announced the schemes of one percent tax for traders having annual turnover of up to Rs. 200 million or less.

Usman Shaukat, President Rawalpindi Chamber of Commerce and Industry (RCCI) said that the scheme was developed after detailed consultations with traders, terming the inclusion of their proposals a positive development, but added that its success would depend on practical enforcement.

In an jnteraction with APP on Saturday,  Usman said that retailers with annual turnover of up to Rs. 200 million would be eligible for the scheme, noting that determining the threshold through mutual consultation would help build trust among traders.

He termed the one percent fixed tax rate was relatively simple and workable, but emphasised that its application must be made clear and transparent to avoid difficulties for traders.

The government has also allowed adjustment of withholding tax under the scheme, which, he said, could provide relief to the business community if implemented properly.

Usman urged that the traders must be properly informed about the requirement to deposit a minimum of Rs. 25,000 in cash at the time of filing returns to avoid any confusion.

According to the scheme, a simple one-page form has been prepared in Urdu and regional languages, which can also be submitted through a mobile application.

“Simplifying the form had been a longstanding demand of traders that had now been fulfilled”, said RCCI President adding that  technical support and guidance should also be provided to traders on submission of forms digitally.

Under the scheme, registered retailers will be issued an FBR registration plate to be displayed outside their shops. He said that the presence of the plate would help reduce unnecessary interference by tax officials, calling it a positive step that could improve traders’ confidence and the overall business environment.

Usman Shaukat said most issues in the past had emerged during the implementation phase, stressing that a careful strategy must be adopted while enforcing the scheme.

“The progress of the scheme should be closely monitored in the coming weeks and months, and necessary adjustments made based on outcomes”, Usman added.

Talking to APP, senior trader leader and The President of the Central Traders Association of Rawalpindi, Malik Shahid Ghafoor Paracha  said the newly announced policy for small traders appeared positive in principle, but its real impact would become clear over time, particularly if no additional conditions were introduced during implementation. He said that the trader community was willing to pay taxes and contribute to the national economy, but emphasised that a simple and transparent system was essential for broader compliance.

He appreciated that the simplified form in multiple languages and ease of registration could help expand the base, especially if awareness was extended to traders in both small and large markets.

Shahid Ghafoor Paracha cautioned that complications often arise at the implementation stage when new conditions are added, and urged the finance minister and relevant authorities to keep the scheme as simple as originally designed. He highlighted that bureaucratic interference in the past had undermined similar initiatives and must be avoided.

He said the trading community would fully participate in the scheme if it remained facilitative, adding that the issuance of a tax registration plate would protect compliant traders from unnecessary audits and undue interference by tax officials. He expressed confidence that the scheme could succeed if implemented fairly and consistently.A senior trader leader Sharjil Mir announced his support for the scheme and appreciated the government for involving the trading community in policymaking. He said presenting the scheme and forms in Urdu and other languages would enable more traders to understand and join the system with ease.

Sharjil, however, urged the government to reconsider the one percent tax rate, arguing that many small traders operate on very thin profit margins. He said in cases where traders earn only one to two per cent profit, paying one percent tax on turnover could significantly reduce their net income. He suggested that reducing the tax rate would make the scheme more inclusive for small vendors, including pushcart sellers and grocery shop owners.

He further called for a review of the Rs. 25,000 fee associated with registration or return filing, terming it an unnecessary financial burden. He also proposed the development of a dedicated, user-friendly mobile application for traders, enabling them to file returns, declare income, and pay taxes conveniently, which could significantly increase participation in the tax net.