FBR simplifies retailers’ income tax return form

KARACHI: The Federal Board of Revenue (FBR) has finalised the fixed tax rates and drafted one-page income tax return form to facilitate small shopkeepers, sources said on Wednesday.

According to the proposed rates, a small shopkeeper operating business activity on up to 150 square feet is required to pay fixed income tax of Rs20,000 in a year. The proposed rate is for shopkeepers who are not falling in designated areas.

The sources said the FBR would notify the fixed income tax rates and income tax returns and wealth statement forms in the coming days. The FBR would also notify categorisation of areas to implement fixed tax regime (FTR), they said.

An amount of Rs35,000 as fixed income tax has been proposed for shopkeepers operating up to 150 square feet in categorised or designated areas.

The shops on area above 150 square feet, but less than 300 square feet in uncategorised areas have been proposed to pay Rs25,000 per annum. Those shops having similar areas, but in categorised areas would pay Rs40,000 as income tax per year.

As per the draft tax return under small shopkeepers' scheme, a shopkeeper would be required to submit details, including name, CNIC, address, covered area of shop, turnover and tax chargeable in a tax year.

The draft simplified one-page return form for traders has also been finalised, the sources said, adding that the draft return would require details of sales, purchases, expenses and payment of tax.

The draft simplified return form for traders would require details of bank account, which is not mandatory in case of small shopkeepers. The sources said the traders would also require filing of wealth statement, which has also been drafted as a one-page form.

The FBR had drafted simplified income tax return and wealth statement forms in pursuance to agreement signed with the traders association on October 30, 2019.

The draft return and wealth statement forms would be notified soon for stakeholders input and then it would be made part of the statute, the sources said.

It would take considerable time and this segment of the economy may not be able to make compliance by due date for return filing for the tax year 2019, as extended by the FBR up to January 31, 2020.

An official at the FBR, on the condition of anonymity, said the fixed tax regime and return filing requirement for small shopkeepers and traders would be implemented for the tax year 2020. The return filing date for the tax year 2020 would be September 30, 2020, the official added.