Karachi, April 3, 2024 – The Federal Board of Revenue (FBR) has instituted a penalty of Rs 10,000 for shopkeepers and traders who fail to comply with income tax registration requirements, as part of its concerted efforts to bring the large undocumented retail sector into the tax net.
The FBR launched the Tajir Dost tax scheme on April 1, 2024, aimed at formalizing the extensive informal retail sector by compelling shopkeepers and traders to register with tax authorities under Section 181 of the Income Tax Ordinance, 2001.
Failure to meet the registration deadline of April 30, 2024, will result in a penalty of Rs 10,000 for shopkeepers and traders, as per the FBR’s directives.
The FBR has embarked on a comprehensive income tax registration process targeting shopkeepers and traders in six major cities across Pakistan.
Under the newly introduced Tajir Dost (Special) Procedure, 2024, small traders are required to initiate minimum monthly advance tax payments, starting from July 1, 2024. These payments will be facilitated through a dedicated Computerized Payment Receipt against the Payment Slip ID (PSID).
The term “shopkeeper” encompasses various business categories, including wholesalers, dealers, retailers, manufacturer-cum-retailers, importer-cum-retailers, or any individual engaged in retail and wholesale activities within the supply chain of goods.
The Tajir Dost (Special) Procedure, 2024, applies to traders and shopkeepers operating from fixed business premises such as shops, stores, warehouses, offices, or similar physical locations within the territorial civil limits, including cantonments, in major cities like Karachi, Lahore, Islamabad, Rawalpindi, Quetta, and Peshawar.
For individuals failing to register within the specified timeframe, the Commissioner Inland Revenue will initiate the registration process on their behalf, as per the FBR’s statement.
Taxpayers have the opportunity to avail a 25 percent reduction in advance tax payable by opting to pay the entire remaining advance tax for the relevant tax year in a lump sum before the due dates for payment. Additionally, individuals who file an income tax return for Tax Year 2023 before the due date for the first monthly installment will benefit from a 25 percent reduction in advance tax payable, according to the FBR.
This initiative marks a significant stride towards formalizing the informal sector and ensuring greater adherence to tax regulations among shopkeepers and traders nationwide.
The FBR has urged all eligible individuals to promptly complete the registration process within the specified timeframe to avoid penalties or legal implications, emphasizing the importance of compliance in fostering a transparent and equitable tax system.
