The Federal Board of Revenue (FBR) has unveiled a comprehensive strategy in line with the directives from the International Monetary Fund (IMF), aiming to bolster tax revenue and formalize the economy. This initiative focuses on integrating approximately 3.5 million traders into the tax system by utilizing monthly electricity bills as a conduit for tax collection.
Rather than imposing taxes directly on shop owners, the proposed plan suggests levying taxes on individuals engaged in business activities at these establishments, contingent upon their taxable income. To facilitate this process, a new segment dedicated to traders would be introduced in electricity bills, simplifying monthly tax collection.
Under the scheme, the annual income of traders would be divided into 12 segments, allowing for a smoother tax collection mechanism. FBR officials have proposed the implementation of this initiative before the unveiling of the new fiscal year budget.
However, the actual execution of the plan hinges on receiving approval from the newly formed coalition government. FBR sources indicate that they are awaiting the government’s go-ahead to proceed with the scheme’s implementation. Additionally, it has been disclosed that the IMF has been briefed regarding the proposed plan, with expectations that its implementation would significantly augment revenue generation and foster economic formalization.
Overall, the introduction of this scheme underscores FBR’s concerted efforts to address IMF mandates, enhance tax revenue, and advance economic documentation in Pakistan.
