Islamabad: According to a news source on January 25, the Federal Board of Revenue (FBR) is introducing a simple tax plan targeted at the retail industry as part of its attempts to encourage more companies to join the formal economy and reduce the size of the unorganized sector.
The FBR intends to streamline tax procedures for merchants, retailers, and particular persons, making it simpler to estimate their profits, as the information disclose. This program is expected to result in an increase in income tax revenue of between PKR 400 billion and PKR 500 billion.
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The federal cabinet was presented with the details of the proposed program and was waiting for their approval. According to a senior tax official, the goal of this program is to make the process of determining the income of merchants and traders more efficient.
Even while the retail and wholesale sector makes up a large share of the GDP (18%), its tax contribution is still disproportionately low at just 4%. The government has been steadfastly trying to better incorporate this industry into the tax system since it realized this gap. Nevertheless, prior attempts have not produced the intended results.
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