ISLAMABAD   -   Business community will observe a nationwide shutter-down strike today (Wednesday) in protest against the government’s tax policy ‘Tajir Dost Scheme’.

Businessmen of the major cities including Karachi, Lahore, Rawalpindi and Islamabad have announced a strike against the government’s ‘Tajir Dost Scheme’. They rejected the scheme, calling it impractical as the shopkeepers could not pay heavy taxes. They urged the government to review agreements with independent power producers (IPPs), eliminate taxes and the slab system on electricity bills, and roll back recent increases in gas prices, extra security charges, and oppressive slabs. An official of the FBR informed that the government would not withdraw the scheme due to the pressure of business community. He further said that the government could negotiate on reducing taxes under the scheme.

The Federal Board of Revenue (FBR) had announced its Tajir Dost Scheme, aiming to bring traders and wholesalers into the formal tax structure as required by the IMF. The IMF has urged the FBR to implement the tax structure for retailers starting in July. The FBR has so far registered over 58,000 small traders/new shopkeepers under the scheme. The government had projected to collect Rs50 billion from the scheme by registering around 3.2 million retailers in the current fiscal year.

Based on the location of shops, the FBR has issued market/area wise indicative income, indicative income tax and Monthly Advance Tax to be paid by small traders. Under the monthly tax payment plan, the traders and shopkeepers in 78 percent of the areas/markets would be required to pay monthly advance income tax of Rs 5,000. The monthly tax payment would be Rs 10,000 per month for traders covered in 14 percent markets of the country. The tax payment would be Rs 20,000 per month in 5 percent areas. Traders would pay Rs 30,000 per month as tax instalment in 2 percent areas and Rs 45,000 monthly payment in 0.6 percent areas and traders would pay monthly advance income tax of Rs 60,000 per month in 0.40 percent markets of the country.