FBR Fails to Collect 99% Tax From Traders Under Tajir Dost Scheme

The Federal Board of Revenue (FBR) has not collected even Rs. 1 million of the Rs. 10 billion tax collection target under the Tajir Dost Scheme proposed by the International Monetary Fund (IMF) billion for the first quarter of this fiscal year. The tax machinery has somehow missed out on 99.99 percent of the target, reported Express Tribune. By mid-October, fewer than 600 traders had contributed less than Rs. 1.3 million in taxes. The federal government must collect Rs. 23.4 billion under the FBR scheme in October-December 2024 besides the yearly goal of Rs. 50 billion. IMF in its latest report on Pakistan said the floor on the net tax revenue from retailers registered under the Tajir Dost scheme is defined as the sum of revenues from the advance tax paid by retailers registered under the scheme. Net revenue collection is measured quarterly based on cumulative end-of-quarter data. The floor on net tax revenues collected by the Federal Board of Revenue (FBR) from retailers under the Tajir Dost scheme for the July-September quarter is Rs10 billion, it said. The scheme aims to bring retailers into the tax net through the Tajir Dost scheme, implementing the Compliance Risk Management (CRM) framework, and expanding the Compliance Improvement Plan (CIP). The government expects to generate Rs. 250 billion through these revenue administration measures. The Tajir Dost scheme was initially expanded to 36 additional cities, and a Statutory Regulatory Order (SRO) to extend the scheme to these cities was to be issued no later than July 2024, with mandatory tax collection starting in FY25 Q1. Despite the Q1 shortfall, the federal government has still assured that the scheme’s expansion to additional cities is part of its broader effort to bring the service sector into the tax net.