Mohsin Siddiqui (Chief Reporter)
The Federal Board of Revenue (FBR) has announced a significant expansion of its Tajir Dost scheme, extending its scope from six to 42 cities across Pakistan. This move aims to streamline tax procedures for retailers and ensure broader compliance within the retail sector. The updated scheme, officially documented in the Tajir Dost (Special) Procedure, 2024, introduces new tax guidelines and procedures that will affect a wide range of retail businesses.
The FBR’s recent notification details the inclusion of 36 new cities in the Tajir Dost scheme, which previously covered only six cities. The newly added cities are Abbottabad, Attock, Bahawalnagar, Bahawalpur, Chakwal, Dera Ismail Khan, DG Khan, Faisalabad, Ghotki, Gujranwala, Gujrat, Gwadar, Hafizabad, Haripur, Hyderabad, Islamabad, Jhang, Jhelum, Karachi, Kasur, Khushab, Lahore, Larkana, Lasbela, Lodhran, Mandi Bahauddin, Mansehra, Mardan, Mirpurkhas, Multan, Nankana, Narowal, Peshawar, Quetta, Rahim Yar Khan, Rawalpindi, Sahiwal, Sarghoda, Sheikhupura, Sialkot, Sukkur, and Toba Tek Singh.
This expansion is part of the FBR’s broader strategy to enhance tax compliance and improve revenue collection across the country. The notification outlines the tax obligations for retailers in these cities, specifying a monthly tax payment that ranges between Rs100 and Rs20,000. The amount of tax a retailer must pay is based on the fair market value of their shop, as detailed in the attached schedule of the notification.
Under the new procedures, the advance tax payable by retailers will be calculated based on their indicative income, as outlined in Division I of Part I of the First Schedule to the Ordinance. The tax amount will be determined according to the rates specified in Schedule – II of the Ordinance. Indicative income refers to the income specified in column (4) of the Table in Schedule-II, which is determined by the FBR based on several factors, including the rental value of the property, its location, and its fair market value.
The term “shopkeeper” has been broadly defined to include various types of businesses and individuals involved in retail activities. This includes wholesalers, dealers, distributors, retailers, manufacturers-cum-retailers, importers-cum-retailers, or any person who combines retail with wholesale or other business activities.
In terms of jurisdiction, the income tax authority responsible for enforcing the provisions of the Ordinance will also have jurisdiction over individuals and businesses defined under the scheme. This includes the authority to impose and collect default surcharges, seal shops, and initiate prosecution proceedings as stipulated under sections 205, 182, and 191B of the Ordinance.
The expanded Tajir Dost scheme is designed to ensure that all eligible retail businesses across the newly included cities comply with the updated tax regulations. Retailers in these cities will now need to adhere to the new tax payment schedules and procedures, and the FBR has provided detailed guidelines to facilitate this transition.
The expansion of the Tajir Dost scheme is expected to have a significant impact on the retail sector. By broadening the scope of the scheme, the FBR aims to increase tax compliance and enhance revenue collection. Retailers in the newly added cities will need to adjust to the new tax requirements and ensure they meet their obligations under the updated procedures.
The FBR’s initiative reflects a commitment to improving the efficiency of tax collection and addressing gaps in the existing system. The new procedures are designed to provide a more comprehensive framework for tax compliance, which should benefit both the tax authority and the retail sector in the long run.
