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16 February 2024

HomeBusinessFBR plans to generate up to Rs500b income tax revenue

FBR plans to generate up to Rs500b income tax revenue

FBR plans to generate up to Rs500b income tax revenue

FBR plans to generate up to Rs500b income tax revenue

ISLAMABAD: (Web Desk) The Federal Board of Revenue (FBR) has launched a simplified tax scheme to potentially generate income tax revenue ranging from Rs400 billion to Rs500 billion.

The new scheme is part of FBR’s effort to increase the size of formal economy. The new tax scheme is aimed at taxing the estimated incomes of traders, retailers and specified individuals.

The details of the scheme were presented to the federal cabinet for endorsement. For the purpose, a specialized mobile application named ‘Tajir Dost’ has been developed to streamline income calculation and tax collection. The proposal takes into account factors like shop location, value and rent to determine indicative incomes.

Tax payments will be made in 12 monthly installments, with a 50 per cent discount offered to proactive individuals who file tax returns before the first monthly installment.

Moreover, the minimum tax can be adjusted based on self-declaration in the annual return to encourage timely tax filing.

The purpose of the scheme is to bring the remaining 3.2 million retailers, primarily located in major cities, into the tax net so as to expand the tax base and revenue collection. At present, only 300,000 out of an estimated 3.5 million retailers actively file tax returns.

Because of the timely clearance of liquefied natural gas shipments and impressive domestic sales tax collection, The FBR exceeded its December target by Rs7 billion.

In December, The revenue collection stood at Rs982bn against a projected target of Rs975bn. The revenue collection increased by 34pc when compared with Rs732bn over the corresponding month last year.

During the first half (July-December) of FY24, the FBR collected Rs4.467 trillion, exceeding the Rs4.425tr target by Rs42bn, according to FBR data.

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