AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Karachi, The Federal Board of Revenue (FBR) has recently addressed several key questions regarding the newly introduced Trader Friendly Scheme, aimed at simplifying tax procedures for small and medium-sized businesses across various sectors. This initiative is designed to encompass a wide range of traders, including wholesalers, retailers, and shop owners, facilitating a more streamlined tax submission process while promoting compliance.
According to Federal Board of Revenue, the scheme targets an extensive array of businesses, excluding companies and national or international chain stores operating across multiple cities. It provides clarity on the registration process, tax submission, and the relationship between the new scheme and existing income tax obligations. For traders already registered under the Income Tax, no re-registration is required for the Trader Friendly Scheme. However, starting July 1, 2024, participants will need to submit monthly advance income tax under this new framework.
The FBR further explained that the Trader Friendly Scheme does not cancel existing income tax registrations, emphasizing that those already compliant with income tax submissions merely transition to the new scheme without needing to register anew. Despite the introduction of the Trader Friendly Scheme, traders must continue to file their annual income tax returns as usual.
For the fiscal year 2024-25, the process of tax deposition has been outlined, with traders expected to pay monthly advance tax specifically tailored within the new scheme. This adjustment aims to alleviate the tax burden by integrating the scheme with the quarterly advance income tax payments for eligible traders.
The scheme’s applicability extends to all retailers, including Tier-I retailers, though it remains distinct from sales tax registration requirements. Importantly, the FBR highlighted that while the Trader Friendly Scheme is focused on income tax, traders mandated to register for sales tax should comply with those requirements separately. Additionally, the scheme’s enrollment does not necessitate registration in the Point of Sale (POS) system for most traders, except for Tier-I retailers who are obliged to register.
Addressing the utility bills’ tax adjustment, the FBR assured that the income tax paid on monthly electricity bills could be accounted for within the Trader Friendly Scheme, providing further ease of tax management for traders.
This comprehensive clarification session by the FBR signifies a significant step towards fostering a more business-friendly tax environment, aiming to ensure that traders across Karachi and beyond can navigate the tax landscape more efficiently.