Pakistan’s tax agency, the Federal Board of Revenue (FBR), is expanding a fixed tax program for retailers in 42 cities. This program aims to increase tax collection and broaden the country’s tax base.

The program will set a minimum tax amount that retailers must pay each month, depending on the location and size of their shop. This amount will range from Rs100 to Rs10,000 per month. The FBR hopes to collect Rs50 billion rupees in total taxes from this scheme this year.

This initiative is part of an agreement with the International Monetary Fund (IMF), an international organization that helps countries manage their finances.

Pakistan’s Prime Minister, Shehbaz Sharif, is expected to visit the FBR headquarters to discuss using technology to improve tax collection.

The FBR has shared details of the program with retailer representatives. The initial launch of the Tajir Dost Scheme program in six cities was unsuccessful—only a small number of retailers registered for the program. There are over 3 million retailers in Pakistan, but so far, only about 44,830 have signed up.
Similar programs to bring retailers into the tax system have failed in the past. The government has sometimes given in to pressure from shop owners who don’t want to pay taxes.

Under the new program, the amount of tax a retailer will pay will depend on the estimated value of their shop’s sales. The FBR hopes that this system will be fairer and more easily enforced.
The FBR previously tried using technology to track sales and collect taxes, but these efforts could have been more successful. The technology was not reliable, and the FBR needed a clear plan for using it.