Karachi, July 29, 2024 – The Federal Board of Revenue (FBR) has announced July 31, 2024, as the deadline for shopkeepers and retailers to make the first monthly payment of advance tax under the Tajir Dost Scheme.
This simplified tax initiative aims to ease the tax burden on small retailers and shopkeepers by allowing them to pay their income tax liabilities in monthly installments.
The Tajir Dost Scheme was launched for the tax year 2024, with the first payment due on July 31, 2024. Following this, retailers and shopkeepers are required to pay monthly advance tax by the 15th of each month. The scheme, introduced through SRO 457(I)/2024 on March 30, 2024, was implemented on July 22, 2024, via SRO 1064(I)/2024, which modified the Tajir Dost Special Procedure.
The FBR has identified 42 major cities where this scheme will be applicable, setting tax rates based on the estimated income from different localities. The latest notification introduces significant changes to ensure that only eligible shopkeepers and retailers benefit from the new tax rates. For instance, retailers or shopkeepers who filed their income tax return for the tax year 2023 before March 30, 2024, and whose advance tax liability under section 147 exceeds the computed advance tax under this special procedure for the tax year 2025 and onwards, are not eligible for the scheme, according to the FBR.
Additionally, the scheme excludes shopkeepers with a shop size of 100 square feet or less in a residential area or those whose income is exempt under any provision of the Income Tax Ordinance. The advance tax payable on indicative income will be calculated at the rates provided in Division I of Part I of the First Schedule to the Income Tax Ordinance, 2001, for the relevant tax year, as specified in Schedule – II. A reduction of 25% in advance tax is applicable if the installments for the succeeding months are paid in a lump sum or if a non-filer for the tax year 2023 files a return and pays tax on their income equal to or more than the tax on indicative income computed in Schedule – II of this procedure, the FBR said.
For small shop owners, the FBR has specified that any person owning a shop of 50 square feet or less in a commercial area, or a makeshift shop, kiosk, or small shop measuring not more than 5×3 square feet, will be liable for a fixed advance tax of PKR 1,200 per annum. However, this provision does not apply to commercial areas listed in Schedule – III, where advance tax will be paid as specified in Schedule – II.
This initiative is part of the FBR’s broader efforts to streamline tax collection and improve compliance among small retailers and shopkeepers. The FBR hopes that by simplifying the tax payment process and offering installment options, more businesses will be encouraged to comply with their tax obligations, ultimately increasing the overall tax revenue.
With the deadline approaching, shopkeepers and retailers are urged to ensure timely payment of their advance tax to avoid any penalties and to take full advantage of the Tajir Dost Scheme.