ISLAMABAD: Finance adviser Abdul Hafeez Shaikh announced on Wednesday that the federal government and business community have reached an agreement that would create facilities for traders to continue their activities across the country.
The finance adviser made the announcement in a press conference after holding dialogues with the protesting traders observing shutter down strike.
Hafeez Shaikh said that those traders with an annual sale of Rs100 million will not be made withholding agent as the financial institutions have reduced the turnover taxation rate from 1 to 0.5 per cent. He further added that the limit is also set up to Rs2 million for electricity bills for registration of the sales tax.
Moreover, the government will review the turnover rate for the wholesalers getting less profit, whereas, the issues related to the jewellers will also be resolved on a priority basis. The financial authorities will set up a desk in the Federal Board of Revenue (FBR) office to resolve traders’ issues.
“For the new registrations, tax return forms will be provided in the Urdu language as well.”
The government has also postponed the implementation of CNIC [computerised national identity card] condition for the businesspersons till January 31 – 2020, whereas, the legal actions will remain suspended for next three months, he announced.
Hafeez Shaikh highlighted that only around 393,000 are taxpayers out of more than 4 million traders. The government is willing to gain the confidence of the business community to increase tax net, he added.
“Prime Minister Imran Khan believes on policies revolves around the nationals for their betterment. We can reach our destiny by making fast pace improvements in the national economy.”
Earlier on Tuesday, traders had announced to continue shutter-down strike on Wednesday (today) as deadlock persisted despite holding talks with the federal government. The dialogues between the federal government and traders remained inconclusive yesterday.
It may be noted here that the Federal Board of Revenue (FBR) chairman Shabbar Zaidi had already announced that the authorities will further relax the condition of CNIC number under the sales tax act which declared the misreporting of the national identity number and national tax number (NTN) as a punishable offence.
Earlier on July 23, the Federal Board of Revenue (FBR) had made it mandatory for all buyers to show their Computer National Identity Card (CNIC) while making purchases over Rs50,000 from a sales tax registered person. The FBR explained the new condition in a sales tax notification on Monday which stipulates the amendments being made to the Sales Tax Act, 1990. Later on October 4, the federal government had decided to relax the condition for which the manufacturers and suppliers had been complaining about not having a mechanism for detecting fake and third party’s CNIC.
Agencies add: Traders protesting against the government’s harsh taxation measures decided to call off their protest after successful talks with the government on Wednesday . The traders decided call off the country-wide protests after the Federal Board of Revenue (FBR) agreed on eleven points regarding taxation on businesses in the country.
According to Chairman All Pakistan Anjuman-e-Tajiran (APAT) AjmalBaloch the following points were agreed between the government and the traders
1 – The government will not launch any action against traders who are not buying and selling goods on the basis of their CNIC till January 31 of next year.
2 – Traders making a turnover of 100 million will give a turnover tax of 0.5 per cent, rather than the 1.5 per cent currently set by the government.
3 – Any trader making a profit of 100 million will not pay the withholding tax.
4 – Registration for the sales tax will be done if a trader’s yearly electricity bill is more than 1.2 million, rather than the Rs 600,000 currently set by the government.
5 – Turnover tax for low profit making sectors will be determined in consultation with a committee of traders. FBR will address the problems faced by the traders after consulting the committees that will be formed at the regional and central levels.
6 – Problems of the jewelers will be resolved on a priority basis with the help of the Jewelers Association.
7 – Withholding tax imposed on brokers’ license renewal fees will be reviewed.
8 – A special desk will be set up in the FBR’s headquarters in Islamabad to resolve the problems faced by the traders which will be led by a 20 or a 21 grade officer. While, monthly meetings will also be held with the representatives of the traders.
9 – A simple form will be formed for the registration and income tax filing for new traders.
10 – Shops smaller than 1000 square feet will be exempted from sales tax and any decision regarding the issue will be taken in consultation with the traders’ committee.
11 – Any decision regarding the registration of sales tax for retailers, involved in the whole sale business, will be done in consultation with the traders’ committee.