Govt plans fines on shopkeepers not registered under Easy Tax Scheme

The federal government has decided to act against shopkeepers who did not register under the Easy Tax Scheme. Minister of State for Finance Bilal Azhar Kayani briefed the National Assembly Standing Committee on Finance, chaired by Naveed Qamar, on Tuesday.

Kayani said the demands of traders had been met, but registration under the scheme did not turn out as expected. Legal action and fines against non-filer shopkeepers are therefore beginning, he said. According to ProPakistani, he also said the government had accepted all major demands of the business community and wanted to bring more people into the tax net.

ProPakistani reported that the proposed penalties are Rs. 10,000 in the first month, Rs. 25,000 in the second month and Rs. 50,000 in the third month. Enforcement would target retailers who stayed unregistered or did not file income tax returns. The registration deadline expired on October 31.

According to ProPakistani, traders had agreed to penalties for not filing returns when the scheme was designed with their representatives. The government had offered them a choice between the normal tax regime and a simplified mechanism. It collected retailer data through commercial electricity meters installed by power distribution companies, which indicated about 3.5 million shopkeepers across the country.

The uptake was low. ProPakistani reported that only 220 new traders entered the tax net and about 1,750 shopkeepers registered in total, while the FBR had identified roughly 3.6 million potential non-filers in retail. The initiative aims to raise Rs. 50 billion, and the FBR reportedly wants 200,000 to 500,000 retailers in the formal system.

Committee chairman Naveed Qamar said the government had expected 80 percent of shopkeepers to register, and that if even 20 percent had not, the government was back at zero. He asked how enforcement would work. Kayani said the full procedure would be presented within a few days. He acknowledged that a culture of tax noncompliance has developed in Pakistan, and ProPakistani reported that many traders feared registration could bring unnecessary scrutiny.

Express News reported that the Companies Amendment Bill was postponed in the same meeting because it was not cleared. Qamar voiced concern about misuse of the Export Facilitation Scheme and said the bill was deferred because the FBR chairman, needed for a briefing, was absent.