KARACHI: The Federal Board of Revenue (FBR) has modified Tajir Dost Special Procedure 2024, under which retailers in 42 cities across the country are subjected to fixed rate of tax ranging from Rs100 to Rs20,000 a month depending on the fair market valuation of shops.
According to SRO 1064(I)/2024, retailers or shopkeepers who filed their income tax return for the tax year 2023 before March 30, 2024, and whose advance tax liability paid under section 147 exceeds the computed advance tax under this Special Procedure for the tax year 2025 and onwards, are not entitled to the fixed tax scheme.
Additionally, shopkeepers with a shop size of 100 square feet or less in a residential area, or those whose income is exempt under any provisions of the Income Tax Ordinance are also not eligible for the Tajir Dost Scheme.
Moreover, the tax will be reduced by 25% of the whole or the balance, if the retailer pays in advance, the installments due in succeeding months, in lump sum; or the retailer person who has not filed income tax return, files income tax return for the tax year 2023 and pays tax on his income for the year equal to or more than the tax on indicative income as defined by the Procedure.
Further, any person owning a shop of 50 square-feet or less in a commercial area, or owning a makeshift shop, ‘khoka’ or kiosk, or small shop measuring not more than 5 ×3 square feet, will be liable for fixed advance tax of Rs1200 per annum.
There is a provision of commercial fair value determined by the FBR in case of each city. The FBR’s official notification states that in this special procedure, unless there is anything repugnant in the subject or context, “indicative income” means income as specified in column (4) of the table in the Schedule-II and determined by the Board on the basis of factors including but not limited to rental value of the property, its location and fair market value;
“physical place” includes any place connected to business or an office or a home operating as a business place; and shopkeeper includes wholesaler, dealer, distributor, retailer, manufacturer-cum-retailer, importer-cum-retailer, or such person who combines the activity of retail and wholesale with any other business activity or other person in the supply chain of goods.
The retailers scheme got implemented in Abbottabad, Attock, Bahwalnagar, Bahawalpur, Chakwal, Dera Ismail Khan, Faisalabad, Ghotki, Gujrat, Gwadar, Hafiz Abad, Haripur, Hyderabad, Islamabad, Jhang, Jhelum, Karachi, Kasur, Khushub, Lahore, Larkana, Lasbela, Lodhran, Mandi Bhauddin, Manshera, Mardan, Mirpurkhas, Multan, Nankana, Narowal, Peshawar, Quetta, Rahim Yar Khan, Rawalpindi, Sahiwal, Sargodha, Sheikhupura, Sialkot, Sukkar and Toba Tek Singh.
Under the Tajir Dost (Special) Procedure, 2024 issued by the Federal Board of Revenue (FBR) on March 30, 2024, the traders will pay a minimum monthly advance tax from July 1, 2024 through a separate Computerized Payment Receipt against the Payment Slip ID (PSID).
Initially, the scheme was implemented within the territorial civil limits including cantonments in Karachi, Lahore, Islamabad, Rawalpindi, Quetta and Peshawar.