FBR plans tax scheme for retail sector

The Federal Board of Revenue (FBR) has evolved a simplified scheme for taxing the indicative incomes of traders, retailers and specified persons as part of the documentation to reduce the size of the informal economy. The tax department projects that the newly proposed scheme could potentially generate an income tax revenue ranging from Rs400 billion to Rs500bn. The details of the new taxation scheme were presented to the federal cabinet on Tuesday for endorsement. This scheme is designed to calculate the estimated income of traders and retailers, a senior tax official to Dawn on Wednesday. Despite contributing 18 per cent to the gross domestic product, the tax contribution of the retail and wholesale sector stands at a mere 4pc. Recognising this disparity, the government has been striving for years to effectively incorporate this sector into the tax network. However, these attempts have yet to yield the desired results.