Rs32.5m collected under fixed tax

The government on Friday asked trade leaders to play their part in creating awareness of the fixed tax scheme, as so far only three new shopkeepers had submitted returns amid high hopes that over 9,800 newly registered persons would soon become filers. Against the annual tax collection target of Rs50 billion under the new scheme, the government received Rs32.5 million by Friday. The poor response to the 1% fixed tax scheme could be gauged from the fact that one of the two leading trade leaders, Ajmal Baloch, who negotiated and finalised the scheme with the government, did not submit his tax return. "I have to do it now. I haven't got time," he said. Minister of State for Finance Bilal Azhar Kayani on Friday reviewed the implementation of the scheme. In a meeting, he was informed that so far 428 shopkeepers had filed returns, according to a press statement. However, out of the 428, the new traders who joined the scheme were only three. The finance ministry said that so far 1,929 new traders had registered themselves for joining the tax system. However, out of these, only 57 have drafted returns but have not yet submitted, according to government officials. They said so far 9,806 shopkeepers had drafted their return statements but did not file with the FBR. But only 57 of them were new. Kayani urged the trade leaders to play their role in getting the scheme successful. However, the representatives of traders put the responsibility on the FBR and also complained about hurdles to the online filing of returns. Kayani directed the FBR to immediately address the technical objections raised by shopkeepers and lawyers. He also directed the authorities to provide FBR plates at the earliest to the shopkeepers who had filed returns. Kayani remarked that the fixed tax scheme "is a unique facility designed specifically for shopkeepers and is not available to any other business". Traders have been given exemption from audit, installation of digital devices for transactions and are required to pay only 1% tax on turnover, compared to 35% for a salaried person. The salaried class has raised concerns over the preferential treatment meted out to the traders, who contributed very little to the exchequer compared to Rs630 billion in taxes paid by the salaried class in the last fiscal year. To a question, Kayani said it was irrelevant at this stage to say how many new traders had filed returns, hoping that 9,800, including the 1,929 newly registered, would submit their statements by September 30. He expected that more shopkeepers would join the scheme, saying there was no reason to remain non-filers after the launch of the Asaan Tax scheme. The meeting decided to make daily contacts between the traders and FBR officials to facilitate implementation of the scheme. It was also agreed to further enhance engagement with the tax bars. The meeting was informed that an Urdu language information booklet had been issued to explain the new scheme, the previous procedure for filing returns and details of penalties applicable after the deadline. A penalty of Rs10,000 would be imposed in the first month after the deadline, Rs25,000 in the second month and Rs50,000 in the third month, the finance ministry said. Traders' representatives assured the meeting of their full cooperation, stating that the scheme was a good initiative and it might take some time to create awareness among shopkeepers. It is the second such initiative by the government aimed at bringing traders into the tax net after the earlier Tajir Dost scheme failed to deliver desired results. Kayani was hopeful about the success of the scheme due to the involvement of traders in its design and execution. Although the state minister did not officially give any target for the first year, he voiced hope that a majority of 3.5 million traders would opt for the scheme. New faceless system Meanwhile, the FBR has established the National Faceless Centre (NFC) in Islamabad. The decision was taken by the Board in Council in its meeting held on Friday. The centre is a major reform that changes how tax audits and assessments are carried out in Pakistan. Until now, a taxpayer whose return was picked for audit had to deal with a particular officer in a particular office, often in person. Under the new system, contacts between the taxpayer and the taxman come to an end. Cases will be selected by a computerised, risk-based system rather than by any officer. Each case will then be assigned automatically to an officer, who may be sitting anywhere in the country. The taxpayer will not know who the officer is and the officer will have no say which case comes to him. Every case will pass through three separate hands. One officer will conduct the audit, the second will make assessment and the third will review the work for quality before any order is issued. No officer will control a taxpayer's case from start to finish. All notices, replies and hearings will take place electronically through the FBR's IRIS system. Where the law requires a physical verification or recovery, this will be carried out by a separate field team. The faceless centre draws its legal authority from the Finance Act 2026. It will be headed by a chief commissioner Inland Revenue, with dedicated wings for faceless audit, faceless assessment, quality control and field operations. A Programme Management Unit has already been set up to oversee its rollout.