Fixed Tax Regime for Retailers


The government this year suggested creating a distinctive fixed tax scheme for merchants under the Finance Bill 2022. All retailers will be forced to pay fixed income tax amounts ranging from 3,000 to 10,000 Pakistani rupees through their business electricity bills, with the exception of tier one retailers and some service providers.

The coalition government anticipated that these actions will generate over 30 billion rupees in tax income from merchants.In Pakistan, there are millions of retailers, and despite numerous attempts, successive governments have been unable to tax them. Several plans, including fixed tax plans, have been considered, but each time, retailers threatened to go on strike and force closures of their stores until the contentious tax rules were changed. As a result, the government has scrapped all tax policies that would have affected small retailers.This time, the administration chose to lessen the tax burden after first delaying the proposed fixed tax rate. The tax rate for retailers other than those in the tier one category is now 5% for those with monthly electricity bills under 20,000 rupees and 7.5% for those with bills over 20,000 rupees.

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