Islamabad, March 22, 2024 – The Federal Board of Revenue (FBR) has taken a significant step to ease tax burdens on small traders and shopkeepers by introducing a new ‘Tajir Dost Scheme,’ aiming to streamline tax procedures and promote compliance within this sector.
In a recent announcement, the FBR introduced the draft scheme through SRO 420(I)/2024, utilizing Section 99B of the Income Tax Ordinance, 2001. The ‘Tajir Dost Scheme, 2024’ is designed to facilitate traders and shopkeepers operating through fixed physical locations such as shops, stores, warehouses, and offices within the territorial civil limits, including cantonments in major cities.
The scheme’s eligibility criteria specify that it will not apply to companies or units of national or international chain stores operating across multiple cities, as outlined by the FBR. Furthermore, specific individuals or classes of persons excluded by the FBR are also not covered under this scheme.
Scheduled to be implemented from July 1, 2024, the ‘Tajir Dost Scheme’ mandates that all traders and shopkeepers apply for registration under Section 181 of the Income Tax Ordinance, 2001, or through designated online platforms such as the Tax Asaan app or the FBR portal, or through FBR’s Tax Facilitation Centers by April 30, 2024.
In cases where eligible individuals fail to apply for registration, the Commissioner Inland Revenue is empowered to register them accordingly, with provisions of Section 182 of the Ordinance being applicable to non-compliant traders or shopkeepers.
Under the scheme, traders and shopkeepers are required to pay monthly advance tax, serving as a minimum tax on income derived from businesses covered under this initiative. The computation of monthly advance tax for a tax year will be prescribed by the FBR.
For those whose computed advance tax is zero, a minimum annual advance tax of Rs 1,200 is mandated, excluding income exempted under any provision of the Ordinance.
Moreover, the scheme provides a 25% reduction in advance tax payable if the entire remaining advance tax for the relevant tax year is paid in a lump sum before the due date or if income tax returns for the tax year 2023 are filed before the due date for the first monthly installment.
Monthly advance tax payments, effective from July 1, 2024, are due on the 15th of every month, with payments to be made through a separate computerized payment receipt against the Payment Slip ID (PSID) generated by the ‘Tajir Dost’ module or through FBR’s portal.
Initially, the scheme is rolled out for six major cities, including Karachi, Lahore, Islamabad, Rawalpindi, Quetta, and Peshawar, with the potential for expansion in the future.
The ‘Tajir Dost Scheme’ reflects the FBR’s commitment to supporting small traders and shopkeepers, offering them a simplified tax regime to foster compliance and contribute to the country’s economic growth.
