Karachi, February 7, 2024 – Zubair Motiwala, Chairman of Business Group (BMG), has affirmed his commitment to champion the rights of small traders in Karachi across all platforms.
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KCCI appeals rescuing small traders in Catch-22 situation
Karachi Chamber of Commerce and Industry (KCCI) on Saturday declared Catch-22 situation and urged the government to rescue small traders from its fallout.
Chairman Businessmen Group Zubair Motiwala and President KCCI Muhammad Idrees, while referring to upsurge in petroleum prices by Rs60 within a week along with exorbitant hike of Rs7.91 in electricity base tariff and 44 percent increase in SSGC’s gas tariff by OGRA, stated that a catch-22 situation has been created not only for the industries but also for all segments of society particularly the poor masses and small traders/ shopkeepers who simply cannot bear the burnt and were extremely worried over across-the-board inflation triggered by the rising petroleum prices, gas and electricity tariffs.
READ MORE: Energy price hike jolts trade, industry: Businessmen Panel
In a joint statement, Chairman BMG and President KCCI said that it was really unfortunate that the issues being confronted by small traders, who are an integral part of the economy, were not in government’s priority list and it appears that they have been left alone during the ongoing difficult times.
Zubair Motiwala appealed the government to come forward to rescue the small traders and shopkeepers by devising some kind of an effective mechanism to protect their interest and announce a special relief package for small traders/ shopkeepers which could reduce their cost and ensures that they survive in this era of inflation.
READ MORE: Govt. halts gas supply to export industry: APTMA
He said that the inflation has badly gripped the entire society as prices of almost all the household items have skyrocketed making them unaffordable for majority of the public while those people, who were somehow able to afford, have also become very cautious that has brought down the shopkeepers’ sales to somewhere around 20 to 30 percent.
“In this scenario, how a small trader or a shopkeeper will be able to survive and overcome some inevitable expenditures including gas and electricity bills, shop rent and wages to his workers etc.,” he asked.
“It is undoubtedly a dire situation not only for the poor segment of society but also for the lower middle class and even the middle-class families who have been silently going through hunger and starvation as they, being white-collar and educated individual, cannot complain or beg for help from anyone,” Chairman BMG said, “Inflation genie has to contained at any cost otherwise, it will kill the common man.”
READ MORE: SITE industrialists reject increase in power tariff, POL prices
He further stated that in addition to severe devaluation of rupee against dollar, rising electricity tariff and petroleum prices, it was also a matter of grave concerns that OGRA okayed a whopping increase of 44 percent in gas tariff for SSGC which would prove to be the last straw on camel’s back as it would result in closure of thousands of industrial units, trigger massive unemployment and give a boost to smuggling through misuse of Afghan Transit Trade and other illegal channels. “In this scenario, the economy will stay in hot waters, crises would worsen further and the situation may lead to setting off serious anarchy all over the country”, he cautioned.
He said that when the exports have picked up pace and recorded an increase of 26 percent while the manufacturing sector has also witnessed an upsurge of 39 percent, the anti-business moves including raising the interest rates, increasing petroleum prices, electricity tariff and now appreciating the gas tariff have been taken which would withhold the progress of Pakistan and shut down many industrial units who would surely face bankruptcy.
READ MORE: Yarn merchants for reducing utility prices to save industry
Muhammad Idrees said the production activities of the manufacturing sector supplying goods at the local markets have also gone down due to rising cost of doing business and the subsequent increase in the cost of finished goods. “Why would a manufacturing unit keep on producing goods at same pace and capacity when the local markets have become almost stagnant”, he said, adding that it was a very alarming situation which would raise the unemployment all over the country as many people would lose jobs due to limited production activities and closure of hundreds of industrial units which cannot bear the all-time high cost of doing business.
As after increasing the petroleum prices and electricity tariff, the IMF’s demands have mostly been fulfilled hence, President KCCI urged the government to take notice of the situation and take steps for providing relief to the industries, shopkeepers and the poor masses otherwise things are going to get really difficult.
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Small traders seek FPCCI help in taxation, lockdown
KARACHI: Small traders have sought help of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in resolving their major issues including taxation and coronavirus related lockdown situation.
In this regard a delegation of All Karachi Tajir Ittehad (AKTI) under the leadership of Chairman Atiq Mir visited the FPCCI to felicitate Mian Nasser Hyatt Maggo newly elected President of FPCCI on his success.
The delegation shared its concerns over the issues of taxes, lockdown situation, the anti-encroachment drive of Government, maintenance of infrastructure, emergent situations during urban flooding, and fire incidents.
Mian Nasser Hyatt Maggo President FPCCI said that unfortunately, the megapolis is lacking the chambers for SMEs, cottage industry, and the small traders, he suggested the step by step actions to resolve the issues of markets and business community, starting from a marked area and creating the best service model and carry on the successfully tested procedure throughout the city.
He assured the social service of FPCCI to all business community without any discrimination. He proposed the delegation for a workable concept paper to set a line of action.
The meeting suggested FPCCI, being the head institute of business and industry, to support in markets sustainability and small business enterprises of Karachi.
A working group may be formed for assessing and resolving the issues under the umbrella of FPCCI.
The small business sector is willing to avoid protest for their rights if FBR announces to facilitates the taxpayers and implement business-friendly modules of tax collecting.
Mian Nasser Hyatt Maggo President FPCCI further advised the delegation to produce a pre-budget suggestion paper in the perspective of their issues, which can be included in FPCCI pre-budget recommendations to the Ministry of Finance, Government of Pakistan
The meeting was attended by Athar Sultan Chawla, Hanif Lakhani Vice Presidents FPCCI and the AKTI members.
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Draft return, wealth statement forms for traders finalized
ISLAMABAD: Federal Board of Revenue (FBR) has finalized simple income tax return and wealth statement for small traders, sources said on Sunday.
The FBR has not issued officially the draft returns and wealth statement forms for traders but sources said that the draft had been finalized and would be issued soon.
The draft income tax return form has been simplified. The form is one-page with 15 entries to be filled.
The traders are required to basic information including name, address, business assets and number of employees and bank account number.
The description in required fields to be filed are included: turnover/receipts; cost of sales; opening stock; purchases; closing stock; other direct expenses; gross profit; overhead expenditure; net profit/taxable income; income from all other sources; tax chargeable; minimum tax; tax payable whichever is higher; tax already paid; net tax payable/refundable.
The wealth statement form has also been simplified with small amount of required information.
Draft income tax return form for traders:
Draft wealth statement form for traders:
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FBR to meet for addressing small traders’ concerns
ISLAMABAD: Federal Board of Revenue (FBR) has decided to launch a series of meetings with representatives of traders associations to address concerns of small traders, sources said on Saturday.
In this regard a combined meeting of traders’ representatives and senior officers of FBR will be held on January 22, at FBR House Islamabad.
In the meeting, the chairperson and other senior officers of FBR will brief the traders about the progress on the agreement with the traders and will take them into confidence.
It is worth mentioning that the FBR and traders associations signed an agreement on October 30, 2019 in which 11-point was agreed by the both sides to bring small traders and shopkeepers into the tax net through introduction of fixed tax and simple income tax return form.
The sources said that representatives of traders and the FBR officers would hold a combined meeting on January 24, 2020 at Regional Office Islamabad/Rawalpindi, January 27, 2020 at Karachi, January 29, 2020 at Multan, January 30, 2020 at Faisalabad and January 31, 2020 at Lahore Regional Office.
The sources said that an important meeting between representatives of Trade Associations and Senior officers of Federal Board of Revenue was held last week at FBR House Islamabad.
The traders’ representatives included Kashif Chaudhry, Naeem Mir and Ajmal Baloch whereas FBR Team was led by Acting Chairperson FBR Nausheen Amjad and included Member IR Policy Dr. Hamid Ateeq Sarwar and DG Retail Hameed Memon.
It was agreed in the meeting that committees established throughout Pakistan will be completed in coming two days.
The meeting had discussed issues arising due to turnover tax and decided the issue would be analyzed afresh in the future meeting with the tyre, mobile, ghee, sugar, pulses etc, cement, fertilizer, electronics, yarn, iron steel, paper, automobile and other sectors.
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PM to announce tax relief package for traders on January 20
ISLAMABAD: Prime Minister Imran Khan is set to unveil a tax relief package for traders on January 20, 2020, as confirmed by Syed Shabbar Zaidi, the chairman of the Federal Board of Revenue (FBR), on Saturday.
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FBR to update major initiatives under agreement with traders associations
ISLAMABAD: Federal Board of Revenue (FBR) to update major initiatives regarding small shopkeepers and traders on January 22, 2020.
A meeting of traders associations with FBR officials was held on Thursday at FBR House, Islamabad. Both the sides agreed on completing formation market committees within next two days.
It is also decided to hold a joint meeting on January 22, 2020 in which the FBR will announce major initiatives taken as per agreement signed on October 30, 2019.
Following is the 11-point agreement between the tax authorities and traders associations signed on October 30, 2019:
01. The tax rate shall be lowered to 0.5 percent from 1.5 percent for traders having turnover up to Rs100 million.
02. No liability on a trader having up to Rs100 million to collect / deposit withholding tax on transactions.
03. Threshold of annual electricity bill of Rs600,000 for mandatory sales tax registration has been increased to Rs1.2 million.
04. Turnover tax for sectors having lower returns will be revisted with consultation with traders associations.
05. Tax issues of jewelers will be resolved in consultation with jewelers associations.
06. The renewal license fees on middlemen will be revisited.
07. To resolve traders taxation issues a desk at FBR headquarters will be set up with immediate effect. A BS-20/21 officer will be designated to resolve the traders’ problems.
08. For new registration of traders a simple income tax return form in Urdu Language will be introduced. Trade associations will cooperation in FBR’s registration drive.
09. Which trader will be exempted from registration having 1000 square feet shop will be decided by traders committees.
10. The registration of those retailers engaged in wholesale business will be decided in consultation with traders community.
11. The FBR will take no action on sales transactions without CNIC information till January 31, 2020.
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FBR to launch simplified tax return form for small traders
ISLAMABAD: Federal Board of Revenue (FBR) is set to launch simplified income tax return form for small retailers, sources said on Tuesday.
“The FBR is likely to issue the return form for small return forms in pursuance to the agreement between the tax authorities and traders associations signed on October 30, 2019,” a senior tax official said.
The official said that the FBR had finalized all the formalities to facilitate the small traders as envisaged in the agreement.
The FBR has already extended the last date for filing income tax returns for tax year 2019 up to January 31, 2020.
Certain relaxation to traders have already been announced through Tax Laws (Second Amendment) Ordinance, 2019.
The term “trader” has been defined to mean an individual engaged in business of buying and selling of goods in the same state, including a retailer and a wholesaler but excluding a distributor.
According to PwC A F Ferguson Chartered Accountants the concessions provided to traders are as under:
(i)The general rate of minimum tax payable (under section 113 of the ITO 2001) has been reduced from 1.5 percent to 0.5 percent for tax year 2020 for traders having turnover up to Rs. 100 million. However, for traders who have filed income tax returns for tax year 2018, the tax liability for tax years 2019 and 2020 should not be less than the tax liability for tax year 2018, to become eligible for reduced rate of Minimum Tax of 0.5 percent.
(ii)Individual having turnover of Rs. 50 million or more in any of the preceding tax years is liable to deduct tax under section 153 while making payments against supply of goods, services and contracts.
Through the Second Amendment Ordinance, traders being individuals having turnover upto Rs. 100 million have been exempted from deducting tax under section 153 while making payment against supply of goods, services and contracts. The Board is expected to clarify the year with respect to which turnover of Rs100 million will be calculated by the trader.
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Traders associations nominate representatives to determine turnover for tax registration
ISLAMABAD: Traders associations has nominated their representatives for determination of business turnover for mandatory tax registration.
FBR spokesman said that traders associations had assured of income tax registration of medium and large size retailers.
The spokesman said that the FBR had agreed to genuine demands of small traders and necessary amendments had been introduced through Tax Laws (Second Amendment) Ordinance, 2019.
According to the FBR the condition of CNIC (Computerized National Identity Card) had become part of the law and it was genuine demand of traders to reduce the minimum income tax.
The traders were demanding to reduce the minimum tax because it was high considering their returns and it was the reason the traders were reluctant to declare their details.
In order to ensure filing declaration by the retailers the minimum tax rate has been rationalized, the spokesman said. Further to provide ease in doing business the traders have been excluded from collecting withholding tax.
The spokesman said that traders associations had assured to cooperate with the FBR for bringing medium and large size retailers into the tax net.
In this regard the traders associations had nominated their representatives to determine the turnover of traders for mandatory tax registration.
The traders associations also assured to cooperate with the FBR to resolve audit related issues. The spokesman said that the FBR wanted to better working relations with the trade community for betterment of the economy.
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FBR announces implementation of agreement with traders from next week
ISLAMABAD: Federal Board of Revenue (FBR) on Friday announced implementation of agreement with traders from next week.
FBR chairman Syed Shabbar Zaidi in a tweet message said that committees represented by the traders of each area/ market, covering the whole country will be notified.
“Traders and FBR will work together for registration,” the chairman said and termed it a new beginning for taxation history of Pakistan.
The FBR and trade community were at odd on the implementation of some of initiatives for documentation of economy, especially the introduction of CNIC.
However, on October 30, 2019 an agreement was signed between FBR and traders.
Following is the 11-point agreement between the tax authorities and traders associations:
01. The tax rate shall be lowered to 0.5 percent from 1.5 percent for traders having turnover up to Rs100 million.
02. No liability on a trader having up to Rs100 million to collect / deposit withholding tax on transactions.
03. Threshold of annual electricity bill of Rs600,000 for mandatory sales tax registration has been increased to Rs1.2 million.
04. Turnover tax for sectors having lower returns will be revisted with consultation with traders associations.
05. Tax issues of jewelers will be resolved in consultation with jewelers associations.
06. The renewal license fees on middlemen will be revisited.
07. To resolve traders taxation issues a desk at FBR headquarters will be set up with immediate effect. A BS-20/21 officer will be designated to resolve the traders’ problems.
08. For new registration of traders a simple income tax return form in Urdu Language will be introduced. Trade associations will cooperation in FBR’s registration drive.
09. Which trader will be exempted from registration having 1000 square feet shop will be decided by traders committees.
10. The registration of those retailers engaged in wholesale business will be decided in consultation with traders community.
11. The FBR will take no action on sales transactions without CNIC information till January 31, 2020.