The Federal Board of Revenue (FBR) has revealed a new strategy aimed at boosting tax revenue by an additional Rs. 400 billion through the inclusion of 3.5 million traders into the tax net via their electricity bills.
According to sources familiar with the matter, despite comprising 18 percent of the country’s economy, the retail and wholesale sector contribute less than 5 percent in taxes. In light of this, the FBR’s latest initiative seeks to register 3.5 million businessmen and traders, with an initial focus on major cities such as Islamabad, Lahore, Peshawar, Quetta, and Karachi.
The proposed scheme entails the collection of taxes from traders by incorporating a dedicated column on their electricity bills. Sources indicate that the annual income of traders will be divided into 12 installments, with taxes being levied on a monthly basis through their electricity bills.
Authorities are reportedly planning to formally present this proposal in the upcoming fiscal year budget. Furthermore, it has been disclosed that the International Monetary Fund (IMF) has been briefed on the plan, which is anticipated to generate a significant increase in revenue for the country.
The move comes as part of the government’s efforts to broaden the tax base and enhance revenue collection, addressing longstanding disparities in tax contribution across various sectors of the economy.