Retailers seek tax relief amidst recent policy changes: LCCI

LAHORE  -  Lahore Chamber of Commerce and In­dustry (LCCI) President Kashif Anwar has urged the Federal Board of Revenue (FBR) for SRO 1842(1) 2023 Amendment, saying that retailers seek tax relief amidst recent policy changes. The LCCI spokesperson told media here Sunday that in a bid to address the concerns raised by the LCCI members, President Kashif Anwar has penned a let­ter to FBR Chairman Malik Amjed Zubair Tiwana, urging for amendments in SRO 1842(1) 2023 dated 21-12-2023. The fo­cal point of contention revolves around a recent notification amending rule 150ZEA of the sales tax rules, 2006, specifically targeting Tier-1 retailers under section 2(43A) (g) of the sales tax act, 1990.

Under the revised rule, retailers with a de­ductible withholding tax under section 236 H of the Income Tax Ordinance 2001 exceed­ing Rs100,000/- in the last 12 months are now obligated to integrate with the point of sale (POS) system. Kashif Anwar pointed out that this amendment would affect retailers across 21 different sectors/products, citing their lack of expertise, technical know-how, and financial resources. The crux of the mat­ter lies in the additional burdens on retail­ers. He said that in the previous budget, the condition of 1,000 sq ft was withdrawn because of the hard work of the business community and now this 236 H has been imposed instead of enhancing the turnover of retailers and reducing the tax rate by fa­cilitating more and more unregistered per­sons to come into tax net. President LCCI highlighted that compliance with the new regulations would necessitate hiring profes­sional accountants for record maintenance, filing statements, reporting to the Federal Board of Revenue (FBR). Moreover, the in­stallation of POS systems would further es­calate costs for these already economically challenged retailers. He said that it is not fea­sible to come into sales tax regime overnight as this will create problems for withholding retailers. He noted that this could negatively impact those who are already tax-compliant and documented, potentially discouraging the documented sector, and these overnight changes may result in refrain the unregis­tered retailers to come into the tax net.

The LCCI president expressed deep con­cern over the potential ramifications, assert­ing that these burdens could lead to severe challenges for retailers. Compliance difficul­ties may result in penalties, exacerbating their financial strain. Kashif Anwar stressed the urgency of the matter, calling for im­mediate intervention by chairman FBR to address the predicament. Kashif Anwar pro­posed a concrete solution in his letter. He urged chairman FBR to consider amending the said SRO by substantially raising the pre­scribed threshold of deductible withhold­ing tax for POS system integration. Specifi­cally, he proposed an increase of deductible threshold from Rs100,000/- to Rs500,000/-. This adjustment would be a great favour to the retailers and will enable them to work smoothly. He said the outcome of this appeal could potentially shape the landscape for re­tailers, determining the ease of compliance with evolving tax regulations.