NA panel told Asaan Tax Scheme drew far fewer traders than hoped
Minister of State for Finance Bilal Azhar Kayani told a National Assembly committee that registration under the scheme fell short of expectations. The government plans fines and enforcement against shopkeepers who did not register.
- The Express Tribune reported only 222 new traders joined, against a hope of one million of 3.7 million non-filers.
- The government plans enforcement against traders who did not register, subject to the prime minister's approval.
- The scheme will not be extended after its expiry on October 31.
The federal government has decided to act against shopkeepers who did not register under the Asaan Tax Scheme, Minister of State for Finance Bilal Azhar Kayani told the National Assembly Standing Committee on Finance. He said registration fell short of expectations even though the government had accepted all the demands put forward by traders.
The Express Tribune reported that only 222 new traders joined the fixed tax scheme, against a hope of one million out of 3.7 million non-filers. TechJuice reported that the government had expected 80 percent of shopkeepers to register. The committee expressed disappointment over the scheme's failure.
According to the Express Tribune, the government announced enforcement action against all traders except the 222 who joined, subject to approval by Prime Minister Shehbaz Sharif. Kayani said: "The government is very much committed to take action and we are preparing an enforcement plan for the approval of the prime minister." He also said: "We did not get the kind of response that we had hoped for." He said the full enforcement procedure would be presented to the committee within a few days.
The scheme will not be extended after it expired on October 31, and the government is beginning a new phase of fines and enforcement. The Express Tribune said the government offered traders a new scheme in June, the third since 2022, which also failed. The government consulted the attorney general before taking legal action but did not disclose its nature.
Kayani said the government was considering cutting off services to traders, but such steps could be measures of last resort. Jawed Hanif of the MQM-P recommended that the FBR could suspend bank accounts or other services to compel traders to become filers. Committee Chairman Syed Naveed Qamar said the FBR lacks the manpower to go after all traders. Sources said there could be legal and ethical issues if traders receive a Rs10,000 first default notice under the new scheme.
TechJuice reported that the committee deferred the Companies (Amendment) Bill because it was not cleared and the FBR Chairman was not present for the briefing. Qamar also expressed reservations over the misuse of the Export Facilitation Scheme.
On the EU's GSP+ trade scheme, Qamar said: "We are getting signals that the GSP+ status is in the doldrums because of human rights issues." The government assured the committee there was no threat to duty-free EU access. The scheme runs until December 2028, and a committee led by the deputy prime minister is preparing an application for the new scheme from January 2029, according to Kayani.
TechJuice also reported that the IMF urged Pakistan to address a Rs96 billion tax revenue shortfall for the first four months of the fiscal year and to meet the annual target of Rs15,264 billion. It proposed emergency tax measures if targets continue to be missed. Officials say new taxes or spending cuts may be needed if the shortfall widens.
Why it matters for Pakistan
Shopkeepers who did not register under the scheme may face fines and enforcement action. The shortfall in tax revenue and the IMF programme conditions also bear on the government's tax and spending decisions.
