EconomyPakistan

FBR Launches Tajir Dost Scheme to Broaden Tax Base

The Federal Board of Revenue (FBR) is gearing up to launch the Tajir Dost Scheme, a significant initiative aimed at integrating small traders into the formal tax system. The scheme is set to commence registration on April 1, 2024, with a deadline of April 30, 2024, for traders in six major cities: Karachi, Lahore, Peshawar, Quetta, Islamabad, and Rawalpindi.

Key Points of the Tajir Dost Scheme:

Target Audience: The scheme targets wholesalers, dealers, retailers, and various other traders, including those in furniture, jewelry, cosmetics, groceries, medical and hardware, meat, vegetables and fruits, motor vehicle showrooms, and dealers in fertilizers, pesticides, and chemicals.

Registration: Traders are required to register under Section 181 of the Income Tax Ordinance 2001, which can be done through the Tax Asaan App, FBR’s web portal, or in person at FBR’s tax facilitation centers.

Incentives: To encourage compliance, the scheme offers a 25% discount on monthly advance tax payments for those who pay their total advance tax liability in a lump sum. Additionally, a 25% discount is available for non-filers who file their tax return for the tax year 2023 before the first installment’s due date, with the possibility of increasing the discount to 50% for those who pay the entire advance tax for the tax year 2024 in one go by July 15.

Implications for Traders:

Monetary Penalties: Traders who fail to register by the deadline will face monetary penalties under section 182 of the Income Tax Ordinance 2001.

Tax Collection: The tax collection under this scheme will officially begin on July 1, 2024, with the first payment due on July 15, 2024.

Simplified Registration Process:

The FBR has streamlined the registration process to ensure ease for traders, eliminating the need for assistance from tax lawyers or accountants. This move is part of the FBR’s efforts to facilitate small businesses and promote tax compliance.

Potential for Economic Growth:

The Tajir Dost Scheme is seen as a step towards expanding the tax base and fostering economic development. By bringing more traders into the tax net, the FBR aims to enhance revenue collection and provide a structured tax regime for small businesses.

Latest Developments:

Tax Collection Targets: The FBR has directed selected tax offices and bank branches to remain operational on weekends to meet the monthly tax collection target of Rs879 billion for March 2024.

Political Approval: The scheme has received approval from Finance Minister Muhammad Aurangzeb and is awaiting official notification.

The Tajir Dost Scheme represents a concerted effort by the FBR to enhance tax compliance and support the economic infrastructure of Pakistan. With incentives for early registration and simplified processes, the scheme promises to be a cornerstone in the country’s journey towards a more robust and inclusive financial system.

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