Karachi, November 13, 2024 – The Federal Board of Revenue (FBR) has announced its plan to enforce strict measures on shopkeepers failing to comply with tax registration and payment requirements under the Income Tax Ordinance, 2001.
According to the FBR, shops belonging to individuals who default on their tax obligations may be sealed for a specified period as a first-step enforcement strategy.
As per FBR guidelines, if any trader or shopkeeper is required to apply for tax registration but fails to do so, or if they neglect to pay advance tax as stipulated under a special procedure in Section 99B of the Income Tax Ordinance, their business premises will face closure. FBR stated that in the case of a first default, the offending shop will be sealed for seven days. If subsequent defaults occur, the closure period will extend to 21 days, applying more pressure on shopkeepers to ensure compliance.
Section 99B of the Income Tax Ordinance, 2001, provides a framework for FBR to introduce a special procedure tailored for small traders and shopkeepers. This section grants FBR the authority to specify, through an official notification, procedures governing tax payments, filing of returns, and assessment of traders and shopkeepers operating in designated regions. According to FBR’s policy, this approach aims to streamline the tax compliance process for small businesses while maintaining accountability.
The FBR emphasized that the move to seal shops is intended to foster tax compliance and expand the tax net in Pakistan. Through the enforcement of Section 99B, FBR seeks to simplify the tax payment process for shopkeepers, enabling a smoother registration process. However, non-compliance will lead to stringent measures to ensure that shopkeepers fulfill their legal tax obligations.
In collaboration with local authorities, FBR plans to implement this policy across various cities to address longstanding compliance issues. Shopkeepers are encouraged to regularize their tax status to avoid any disruptions in their business activities. By enforcing this policy, FBR aims to create a fairer system for registered businesses and increase government revenues.
FBR’s actions are part of a broader initiative to combat tax evasion, a persistent issue impacting revenue generation in Pakistan. This new measure underscores FBR’s commitment to strict enforcement and accountability, particularly within the small business sector. Through consistent enforcement and support for new registrations, FBR anticipates improved tax compliance rates among shopkeepers and traders across the country.
The FBR has advised shopkeepers to consult local tax offices or FBR’s official website for further information on the registration process to avoid potential penalties and ensure uninterrupted operations.
