FBR warns unregistered retailers of hefty fines

ISLAMABAD: Minister of State for Finance Bilal Azhar Kayani on Wednesday said that retailers had no option but to register with the Federal Board of Revenue (FBR), warning that unregistered shopkeepers would face enforcement action and fines.

He made the remarks during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla, where the committee discussed the one per cent fixed tax traders’ scheme, retailer registration, tax returns, refunds and special allowances for Senate staff.

Briefing the committee, Kayani said that the retailer scheme had been prepared after continuous consultations with the business community.

He said 10,338 shops had so far been registered, including 2,337 new retailers, while only 787 of the registered retailers were filers.

“There is no option for shopkeepers other than registration,” Kayani told the committee, adding that enforcement measures and fines would be imposed against unregistered retailers.

He said that the FBR would enter markets if shopkeepers failed to register under the scheme.

FBR Chairman Rashid Langrial said that the authority had never before seen such extensive work put into a scheme.

He said some degree of strict enforcement would be necessary for retailer registration, warning that failure to take action could affect future schemes as well.

Langrial said that the number of registrations was currently below expectations, adding that the scheme was also being promoted through social media.

FBR Member Hamid Atiq Sarwar told the committee that there were around 4.3 million retailers in the country, of whom approximately 600,000 were filers.

He said the FBR was seeking to bring another 500,000 to 700,000 retailers into the tax net. Of these, around 200,000 were expected to register voluntarily, while the remaining retailers would be brought into the tax net through enforcement.

Committee member Farooq H Naek said consultations only with trader representatives were not enough and stressed the need for effective publicity of the scheme.

He proposed that the government run a continuous publicity campaign for one month to increase awareness among retailers.

Tax returns rise by 1.5 million

FBR officials told the committee that 5.5 million tax returns had been filed so far this year, around 1.5 million more** than the 4 million returns filed by the same date last year.

Officials said the number of returns was expected to reach 6.5 million by the end of Wednesday.

The committee also reviewed the issue of tax refunds.

Langrial said some refunds had already been paid while the remaining cases were being processed and would be cleared before the prescribed deadline.

Senate staff allowances discussed

The meeting’s second part focused on special allowances for Senate staff.

The Accountant General Pakistan Revenues told the committee that the Supreme Court’s decision on the matter had been received and that other cases could also be referred for reconsideration.

Senator Mandviwalla argued that the Senate had its own institutional structure and should be able to make decisions regarding its employees’ salaries and benefits.

Naek also maintained that the Senate was Parliament and argued that the “relevant department” referred to in the Supreme Court judgment did not mean the Senate.

Mandviwalla gave the relevant authorities 14 days to resolve the issue and directed them to settle the matter within the stipulated period.