Traders, shopkeepers reluctant to register with FBRBreaking

May 06, 2024

The Federal Board of Revenue (FBR) is under tremendous government pressure to bring the shopkeepers and traders into the tax net, but the latter is reluctant to get themselves registered, fearing it might expose them to blackmail and exploitation. Muhammad Latif, a retailer, told WealthPK that every person contributed to the national economy by paying taxes on all items purchased from the market. He suggested the government should improve internal mechanisms and the performance of officials instead of pressuring the already depressed people to pay more taxes. Forced registration of retailers and shopkeepers will hit business activities and government revenue, he said. Supporting his claim, Ashraf said the retailers and shopkeepers might try to find ways to avoid taxes by selling loose products instead of packaged items. This approach will make it difficult for the FBR officials to keep an eye on their sales. He said currently, the shopkeepers were not employing such negative practices. The FBR has started the registration process this month, sending panic waves among the retailers and shopkeepers.

The registration has been started according to the IMF instructions. An FBR officer told WealthPK that the government had planned to impose a minimum annual advance tax of Rs1200 on the retailers and shopkeepers, even if their final tax liability was zero. Talking to WealthPK, Abid Ali, a grocery shop owner, said one could check that all items from a matchbox to other food items were taxed. "Why should retailers get themselves registered with the FBR when the government is already collecting taxes from all segments of the society?" he questioned. He said registration with the FBR meant a regular source of tension for the illiterate shopkeepers and traders. The FBR officials will send them notices only to solicit bribes. Currently, we are beyond their reach, he added. He said the past governments did try to bring the retailers and shopkeepers into the tax net but to no avail. This time, he said the FBR officials would also face difficulties to achieve their task because they are battling inflation without any kind of assistance from the government.

Fayyaz Ahmed, a tailor, said he was earning only Rs35,000 to Rs40,000 per month but the unbridled inflation was significantly hitting his life. He said inflated bills were adding fuel to the fire and now they were hearing that the FBR would register them. In detailing his expenses, he said Rs 15,000 was paid for house rent, Rs3,000 for his three schoolchildren's education, and the rest on food, bills, and other necessities. He asked how the poor segments of the society would pay taxes when the government was doing nothing to battle inflation. "I will not register with the FBR, come what may, because it will open the door for government officials to fleece me," he adamantly said. An FBR officer told WealthPK that the registration of retailers and shopkeepers will help expand the tax net. He said the collected amount will ultimately be utilized to ensure "facilities" for the masses. He contested the traders and shopkeepers claim that the registration would land them in a difficult situation.

Credit: Independent News Pakistan