PHOTO: FILE
The interim understanding was reached during a meeting between the FBR and various associations of traders with FBR Chairman Shabbar Zaidi in chair.
“It has inter alia been agreed with consensus that no adverse action under the Income Tax Ordinance 2001 and Sales Tax Act 1990 will be taken against the traders merely on the basis of information emanating from providing CNIC as required under the Finance Act 2019 till September 30, 2019”, according to a press release issued by the FBR after the meeting.
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It added there will be discussions between the associations and bodies of traders for the finalization of scheme for small shopkeepers for which drafts have been furnished by various trade bodies, which will be taken into consideration by the FBR.
Through budget 2019-20, the government made it legally binding for the industrialists to seek the CNIC from the wholesalers and distributors on sales of over Rs50,000. The move pitched the traders and small shopkeepers against the government.
“As a result of today’s meeting, we have postponed the strike call till September 30,” said Ajmal Baloch, President All Pakistan Anjuman-e-Tajraan –an alliance of the traders.
The traders had given a four-day strike call after Eidul Azha.
Baloch said that the key bone of contention was the CNIC condition, which the traders would not accept. He said that both the FBR and traders would start negotiations again after Eid holidays.
Last week, FBR unveiled a draft of simplified income tax regime for small shopkeepers. But the retailers had their reservations against the draft too, as they did not want to be a part of the formal regime without guarantees.
The traders have been offered five key benefits. They have been proposed to be exempted from audit; will not be bound to file income tax returns to a particular tax office; will not act as withholding agents for FBR and their income tax returns and wealth statements will be simplified.
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The FBR has defined a small shopkeeper as an individual who carries out business at a premises having covered area of less than 300 square feet but does not include a shopkeeper if he is engaged as a jeweler, wholesaler, warehouse owner, real estate agent, builder and developer, doctor, lawyer, chartered accountant or any other category specified by the FBR.
The FBR proposed that the small shopkeeper will pay only 2 per cent of turnover as tax rate or fixed from Rs20,000 to Rs40,000 income tax, whichever is higher. The fixed tax rate will depend on the size and location of the shop.
These people will pay their taxes in two installments - before September and December of every year.
The shopkeeper will become ineligible for the scheme if he does not pay due tax or does not file the income tax return.
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