The Federal Board of Revenue (FBR) is considering penalties and the closure of business premises after its flagship scheme to bring retailers into the tax net received a weak response, according to newly released figures.
Only 1,750 retailers registered under the fixed retailers tax scheme before the October 31 deadline. Of these, just 220 were individuals who had never filed tax returns before, FBR officials said.
The board estimates that around 3.6 million retailers are potential non-filers.
“Only 1,750 have availed the fixed retailers scheme but only 220 are fresh filers,” The News reported, citing FBR officials.
FBR Faces Rs129 Billion Revenue Shortfall
The weak response comes as the FBR struggles to meet its revenue collection target.
The board collected Rs4,088.2 billion during the July–October period, falling short of its Rs4,217.2 billion target by approximately Rs129 billion.
Revenue increased by 7% during the four months, below the 17% growth rate required to achieve the annual collection target of Rs15,264 billion by June 30, 2027.
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The government had expected the fixed retailers scheme to attract between 200,000 and 500,000 retailers and generate approximately Rs50 billion in revenue.
However, the limited registrations have prompted officials to consider stricter enforcement measures.
FBR May Seal Shops of Non-Compliant Retailers
Under FBR rules, retailers who fail to register face escalating penalties.
Non-filers can be fined Rs10,000 during the first month, Rs25,000 in the second month and Rs50,000 in the third month. The board can subsequently seal the premises of retailers who continue to refuse registration.
The FBR has also announced plans to geo-tag markets in upscale neighbourhoods of major cities to identify retailers who should be filing tax returns.
Tax Return Filings Reach 7.6 Million
The number of income tax returns filed reached 7.6 million by the October 31 deadline.
The FBR had extended the filing deadline twice, first from September 30 to October 15 and then to October 31. The board said it would not grant any further extensions.
Meanwhile, October tax collections increased to Rs1,002 billion from Rs975 billion a day earlier, according to the FBR.
The board now faces the challenge of improving compliance and accelerating revenue growth to meet its annual collection target.
