Regime restored under the presidential order: traders transmit their reserves to FBR

ISLAMABAD: In a new development, the trading community on Thursday raised concerns with the Federal Board of Revenue (FBR) over the old regime reinstated under the Tax Laws (Second Amendment) Order of 2022.

Following a meeting between the delegation of Markazi Tanzeem-e-Tajiran Pakistan and FBR here at FBR House. Association President Muhammad Kashif Chaudhry said company registrar that the regime which was reinstated under the recently enacted Presidential Order is not acceptable to the trading community.

The meeting was attended by the FBR Chairman and all relevant FBR members including FBR member Inland Revenue Policy at FBR House. The traders’ camp was led by Muhammad Kashif Chaudhry.

We have shared the detailed plan of a simple fixed scheme with the FBR. The fixed tax regime should be convenient for small traders and traders across the country, Kashif Chaudhry said.

Pakistani President Markazi Tanzeem-e-Tajiran also informed that traders are suffering a lot due to the past decision to impose sales tax on electricity bills, raise electricity and gas prices and the continued depreciation of the rupee against the dollar. He added that the association has also requested the president of the FBR to raise the issue of fuel price adjustment on electricity bills with the government. Merchants need to pay income tax, sales tax, additional tax, additional sales tax and other taxes on invoices.

Order Issued: Coming into Force of Amended Tax Laws

According to an announcement from the FBR on Thursday, the government has abolished the fixed tax on retailers through the recently enacted ordinance. Any new retail tax regime will be planned and implemented in consultation with merchants. The Chairman of FBR held a detailed meeting with representatives of traders across the country at FBR House, Islamabad on Thursday afternoon. 21 representatives of Markazi Tanzeem-e-Tajiran Pakistan attended the meeting and some participants joined via video link.

The President of the FBR solicited proposals regarding the features of the proposed tax regime that would serve to facilitate the filing of tax returns and ensure revenue for the country. The traders appreciated the initiative of the active consultative approach taken by the RBF and offered various suggestions on the matter.

Earlier on August 25, a meeting with the representatives of All Pakistan under All Pakistan Anjuman-e-Tajiran was also hosted by the FBR Chairman in Islamabad. Addressing the participants of the two meetings, the FBR Chairman decided to maintain the follow-up meetings at the FBR headquarters and also at the regional level so that, through consultation and consensus, a feasible and workable taxation system for retailers and traders be worked out. .

The merchants were invited to reflect among themselves internally and to affirm their proposals on the future tax system to be deployed next month.

The next round of meetings will be held next week with trader bodies, the FBR added.

Under the Revenue Laws (Second Amendment) Order 2022, the flat tax scheme introduced for retailers (other than Tier I retailers) on commercial electricity connection has been removed with effect from 1 July 2022 and the previous regime (in force before the 2022 law) has been restored. Instead of a fixed tax on retailers which will cut revenue by Rs 42 billion, we will now revert to the old ad valorem tax system. This will mean a reduction in RBF revenue of Rs 15 billion. We will compensate for this by imposing taxes on tobacco and cigarettes of 36 billion rupees.

The federal government has been empowered to design any future regime and determine its terms, including the rate or amount of the tax and when it will be implemented for retailers to collect the commercial connection tax. Until the new regime is announced by the federal government, the regime prior to the 2022 budget law will remain in force.

Copyright Business Recorder, 2022

Comments are closed.