F.P. Report
ISLAMABAD: The businessmen, while highlighting the FBR’s Tajir Dost Scheme shortcomings, have emphasized the need for a comprehensive consultation and a sustainable roadmap for fostering stakeholders’ confidence and grassroots awareness via campaigns across every market in each major city.
The business community has sparked a diverse reaction to the Federal Board of Revenue’s recently launched the Tajir Dost Scheme, aiming to register traders, wholesalers, and small retailers in tax compliance. The FBR champions the DTS as a progressive step towards enhancing tax registration and revenue generation; dissenting voices, particularly from business people, have raised sincere concerns regarding the scheme’s efficacy and implementation.
In a joint statement, the Chairman of the Chainstore Association of Pakistan (CAP), Rana Tariq Mehboob, and Co-founder CAP Asfandyar Farrukh have raised concerns regarding the scheme’s efficacy and implementation. The official trade body represents tax-paying Tier-1 retail enterprises, that contribute 90% of taxes from the retail sector but have been denied a level-playing field for the past 5 years.
Rana and Farrukh highlighted the scheme’s shortcomings, emphasizing a need for comprehensive consultation and a sustainable roadmap for fostering stakeholder confidence and grassroots awareness via campaigns across every market in each major city. Amid the prevailing challenges, the ambitious plan to reportedly generate an additional Rs. 300-400 million in annual taxes is poised to crash and burn.
Unfortunately, the government has not bothered to take the sector’s real stakeholders on board and imposes flawed policies that serve the purposes of none. Rana underlined the need for broad-based consultation to remove the policy bugs and draw the desired outcomes.
Both the community leaders skepticized the requirement for unregistered traders to file monthly returns when they are not even filing once a year, coupled with major inaccuracies in property valuations for the purpose of business tax assessment.
In a related development, media reports indicate a shortfall in tax collection targets for March 2024, presumably due to economic stagnation, high rates on the already taxed segments and perennially weak enforcement.
Despite reported efforts to boost tax revenues, only half-hearted measures against tax evasion and irregularities are observed due to which, achievement of revenue targets lags behind. The issue of delayed refunds further compounds the challenges faced by genuine taxpayers. With refunds withheld for extended periods without compensation, businesses experience cash flow constraints, hindering their growth and operational sustainability.
Commenting on the ‘Pakistan Honour Card Scheme’ aim to recognize top taxpayers, they said concerns persist regarding the effectiveness, inclusivity and longevity of such programs.
Instead, the formal sector longs for a more equitable and simplified tax regime, devoid of unnecessary bureaucracy and continuous harassment, to enable progressive SMEs to thrive and contribute meaningfully to the economy.
The CAP urged the Ministry of Finance and FBR to sincerely address stakeholders’ concerns and foster an environment conducive to sustainable private-sector led economic growth.
