FBR to Raid Markets to Find Unregistered Retailers

The Federal Board of Revenue (FBR) plans to target markets to locate and register unregistered retailers as the government seeks to broaden the tax base. The tax authority estimates there are approximately 4.3 million retailers in Pakistan, but only around 600,000 are currently registered. The FBR aims to secure an additional 500,000 to 700,000 retailers within the tax system, using enforcement measures when voluntary registration does not suffice.

During a Senate Standing Committee on Finance review, Senator Saleem Mandviwala, who chairs the committee, discussed the government's one-percent fixed tax scheme for retailers, alongside other fiscal matters. Bilal Azhar Kayani, the Minister of State for Finance, explained that the retailer tax scheme emerged after extensive consultations with traders.

He cautioned that unregistered shopkeepers would face enforcement actions and penalties, adding that 10,338 shops have registered thus far, including 2,337 new retailers. However, only 787 of these registered retailers are currently paying taxes. FBR Chairman Rashid Langrial acknowledged that the tax authority has extensively promoted the scheme, especially through social media, but noted that registrations remain below projections.

Enforcement may be required in certain cases, and Langrial warned that failing to act against non-compliant retailers could weaken the foundation for future tax schemes. Member Hameed Atiq Sarwar stated that approximately 200,000 retailers are expected to join voluntarily, while the remaining target of 500,000 to 700,000 additional retailers will be achieved through enforcement efforts.

Senator Farooq H. Naek called for a month-long awareness campaign, stating that consultations alone with traders' representatives are insufficient to guarantee compliance. Tax Returns Sarwar informed the committee that around 5.5 million tax returns had been filed this year, compared to approximately 4 million during the same period the previous year. FBR officials indicated that the number of returns could rise to 6.5 million by day's end.