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Tag: small shopkeepers

  • Miftah assures shopkeepers of removing multiple taxes on electricity bill

    Miftah assures shopkeepers of removing multiple taxes on electricity bill

    KARACHI: Finance Minister Miftah Ismail on Tuesday assured shopkeepers and small retailers of removing all taxes being collected through electricity bills once the fixed tax regime is implemented.

    Responding to demand raised by retailers and shopkeepers, the finance minister promised to remove all the other taxes from the electricity bills once the fixed tax regime is activated to avoid double taxation, as quoted by a press release issued by Karachi Chamber of Commerce and Industry (KCCI).

    “Only GST on electricity consumption will be applicable and at the year end, they will be required to submit a document to intimate the tax authorities about the payment of taxes during the year,” Miftah Ismail was quoted as saying.

    READ MORE: FTO investigates tax collection through electricity bills

    Earlier, the KCCI office bearers highlighted that the government is already charging hefty multiple taxes on electricity bills on commercial units including Electricity Duty, General Sales Tax (GST), Extra GST, Further GST and Income Tax U/S 235 of the Income Tax Ordinance, 2001.

    In response to the protests by small retailers against the fixed retailers’ tax introduced in Finance Act 2022, Finance Minister Miftah Ismail announced to reduce the fixed tax rate from Rs. 6000 per month on non-filers to Rs. 3000 on electricity bills and exempted consumers whose electricity bills was up to 150 units.

    To voice the concerns of the small retailers, Chairman BMG Zubair Motiwala and President KCCI Muhammad Idrees called a meeting of business associations and held talks with Finance Minister Miftah Ismail and Chairman FBR on Zoom.

    READ MORE: Withdrawal of sales tax through electricity bills demanded

    During the session, they expressed concerns over the high rate of taxes being charged through electricity bills. They argued that commercial consumers are already paying multiple taxes in their monthly electricity bills including fuel adjustment surcharge, electricity duty, income tax, general sales tax, extra GST, further GST besides electricity charges, and over and above a new fixed tax has been levied on all commercial consumers which is unsustainable.

    In the meeting held at Karachi Chamber of Commerce and Industry between the Finance team and small traders, the Finance Minister Miftah Ismail promised to waive multiple taxes on electricity bills and also agreed to consider the demands of small traders to increase the threshold.

    After taking the leadership of small shopkeepers on board, Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees urged the government to accept the genuine demands of small businessmen who are already struggling to make both ends meet and increase the suggested threshold of 150 units of electricity consumption from fixed tax regime and remove other taxes from electricity bills.

    READ MORE: Tax through electricity connections on retailers, service providers

    General Secretary BMG & Former President KCCI AQ Khalil stressed on removing other taxes and consider all NTN holders as filers under the fixed tax regime.

    In the Finance Act FY22, the government imposed a fixed tax regime for retailers whereby even the unregistered consumers with zero or minimal units were getting Rs. 6000 monthly tax on electricity bills. After severe hue and cry from small traders against the new fixed tax regime for retailers, the Finance Minister Miftah Ismail announced a revision in the scheme under which up to 150 units of electricity consumption were exempted from the tax and removed the condition to charge double amount of tax from unregistered traders, making it full and final tax and also granted immunity from tax notices, audits and raids by FBR officers.

    To address the concerns, KCCI held an urgent meeting with a delegation of small businessmen receiving fixed tax on electricity bills headed by Abdul Majeed Memon Chairman, Special Committee for Small Trader of KCCI and Talat Mehmood Co Chairman Special Committee for Small Traders accompanied by representatives of several market associations of Karachi.

    READ MORE: FBR explains income tax on export of services

    KCCI had invited all the associations of Karachi and vast majority of them participated in this meeting where they unanimously agreed to the decision of Chairman BMG Zubair Motiwala that the tax may be implemented on the basis of units of consumed where up to 250 units will be exempted from tax and those consuming above 250 units of electricity may be charged fixed tax accordingly. It was also unanimously agreed that all the other taxes including Income Tax, GST Extra GST and Further GST will be replaced with this single fixed tax as full and final tax liability.

    READ MORE: FBR restores 100% depreciation deduction

    The delegation comprised of Muhammad Akram Rana Vice Chairman All Karachi Tajir Ittehad, Asif Gulfam Chairman Alliance of Arambagh Market, Dilshad Bukhari Saddar Jama Mall, Mehboob Azam President All Pakistan Small and Cottage Industry, Mehmood Hamid General Secretary All Pakistan Small Traders and Cottage Industry, Muhammad Feroz President Saddar Cooperative Market, Muhammad Fayyaz Chairman Sind Tajir Ittehad Old City Area, Rafiq Jadoon President All Pakistan Anjumane Tajiran (Bolton Market), Ilyas Memon President Tariq Road Trader Alliance, Nadeem Ahmed Khan President All Karachi Plastic Bags Manufacturing Association, Zulfiqar Shiwani Regional President Sindh Tajir Ittehad, Jamil Parachi Chairman Sindh Tajir Ittehad, Mirza Sadiq Baig Vice President Sindh Tajir Ittehad, Sheikh Muhammad Irshad Jama Alliance,  Chaudry Aamir Ali Khan President Car Association, Abdur Raheem Car Dealers Association, Abdul Qadir Noorani General Secretary Joria Bazar Market, Javed Shams Daniyal President Anjuman Tajiran e Sindh – Karachi Division, Abdul Samad Khan SVP Saddar Alliance of Market Association, Abdullah Batra Chairman Orangi Traders Association, Arif Patel Goldsmith among others. The members of the Managing Committee of KCCI also attended the meeting.

  • FBR urged to resolve return filing issue of shopkeepers, paid taxes under amnesty

    FBR urged to resolve return filing issue of shopkeepers, paid taxes under amnesty

    KARACHI: Karachi Tax Bar Association (KTBA) has urged Federal Board of Revenue (FBR) to resolve return filing by shopkeepers and persons paid duty and taxes under amnesty scheme.

    The KTBA in a letter on Monday, urged the FBR to resolve the issues of retailers and small traders in filing their returns. Further, those persons are also in difficult state who had paid taxes under amnesty scheme but failed to file their returns.

    The KTBA previously submitted it observations on the issues through letters dated September 20 and October 02 and October 30, 2019 with reference to woes of Amnesty Filers and Shopkeepers/Traders in context of Return filing.

    The KTBA reiterated that their issues are still unresolved owing to which they cannot file their Tax Returns for TY 2019 despite repeated extensions.

    The same are being narrated hereunder briefly to invite your necessary attention yet once again.
    The KTBA said that it is critical to decide the fate of filers of the Assets Declaration Scheme of 2019 who could not submit their declarations due to untimely closure of the option on IRIS on July 03, 2019.

    Consequent to which, they could not revise their wealth statements for the Tax Year 2018, which you would appreciate is a necessary component for filing the return of income and wealth for the next year i.e. Tax Year 2019.

    It is apprehended that if they are not allowed to submit their declarations, which they have not been so far, in the last six (06) months, their right to timely file their returns of income for the Tax Year 2019 is systematically been jeopardized and mere extending date of filing wont resolve their problem.

    The group of taxpayers consisting of Shopkeepers and Traders of the country who still have to be given, inter alia, a final format of Return for their tax filing, which the FBR introduced vide its notification under Sections 99B and 9C of the Ordinance and committed that the same would be applicable right from the very Tax Year of 2019.

    The final notification, however, has not yet been issued by FBR either to confirm or to dispel their confusion owing to which, this large group of taxpayers have not yet been able to file their tax return.

    The KTBA said that the instant request should not be treated for further extension in return filing date.

    “It is, therefore, all befitting that the System for submitting Amnesty should be opened for those who paid their taxes on July 3rd and the final Notification for Shopkeepers/Traders is issued to enable them file their Tax returns.”

  • Draft law for collecting income tax from small shopkeepers

    Draft law for collecting income tax from small shopkeepers

    ISLAMABAD: Federal Board of Revenue (FBR) has drafted special procedure for collection of income tax from small shopkeepers.

    FBR sources said that an agreed mechanism between the FBR and small traders would be implemented from next week.

    They said that it would be another big achievement of the tax agency after convincing the banks for sharing information of account holders.

    The share of retailers in income tax collection is very low when compared with their contribution towards the national GDP.

    The sources said that on October 30, 2019 the agreement was finalized between the FBR and small traders for the collection of income tax and also to remove procedural glitches.

    According to draft law the small shopkeeper means an individual where the business is carried out at a premises having covered area less than 300 square feet.

    The small business owners will not include in the definition of small shopkeeper if he is engaged in the activity of a jeweler, wholesale, warehouse, real estate agent, builder and developer, doctor, lawyer, chartered accountant or any other category specified by the Board, a retailer operating as a unit of a national or international chain of stores, a retailer operating in an air-conditioned shopping mall, plaza or center, a retailer who has a credit or debit card machine, any person whose cumulative electricity bill exceeds Rs300,000 in the immediately preceding twelve months; and any person covered under section 99C of the Income Tax Ordinance, 2001.

    As per the draft law the small shopkeepers will be liable to pay income tax biannually.

    The FBR will not conduct examination and audit of small shopkeepers. Further, shopkeepers will also not liable to collect withholding tax.

    The sources said that the rate of tax likely be notified next week. They said whatever tax rate is agreed the tax payment will be increased by Rs5,000 annually.

    The FBR will also notify simple income tax return form for small shopkeepers, which will be filed for tax year 2019 onwards.