LCCI gives feedback to finance minister on SRO 420(I)/2024

LAHORE   -  Lahore Chamber of Commerce and Indus­try (LCCI) Saturday gave its feedback on SRO 420(I)/2024 dated 21st March 2024 and hoped that the suggestions put-forth by LCCI would be given due consideration and incorporated into the draft scheme prior to its implementation.

In this connection, LCCI President Ka­shif Anwar has written a letter to Fed­eral Minister for Finance and Revenue Muhammad Aurangzeb, according to the Chamber’s spokesman here Saturday.

In the letter, LCCI President Kashif An­war said that Lahore Chamber is fully committed to supporting the govern­ment in its efforts to register the shop­keepers and promoting documentation in the economy. Kashif Anwar said that the draft Tajir Dost Scheme proposes Monthly Advance Tax for all traders and shopkeepers. It is pertinent to mention that majority of shopkeepers rely on lawyers for tax filing. The monthly filing requirement will impose administrative burdens and increase the cost of doing business due to additional legal fees and penalties for traders. He recommended Annual/Bi-Annual payment of Advance Tax to alleviate these concerns.

The LCCI president added that the scheme proposes calculating tax based on the trader’s annual rental value, equiva­lent to 10 percent of the fair market value of business premises. “We are of the view that using Rental Value or Area for tax cal­culation lacks rationality, as it has no link with turnover and may result in business­es being taxed on unrealized income.” Given that every retailer has a commer­cial electricity meter, he proposed col­lecting an advance tax through electricity bills based on actual consumption, which should be adjustable in annual Income Tax return. We urge the FBR to reconsider this provision accordingly.

He said that the draft scheme lacks incentives for retailers and proposed in­corporating tangible incentives for regis­tered retailers, such as exemptions from audits and reduced tax rates etc. like Vol­untary Tax Compliance Scheme (VTCS), issued by the FBR in 2016. These incen­tives will serve to incentivize more retail­ers and shopkeepers to register under the Tajir Dost Scheme.

The LCCI President proposed that a single page simplified Tax Return should be introduced for the retailers and shop­keepers. Furthermore, for ensuring con­sistency and continuity of policies, the time frame of this scheme should be for at least five years. He was of the view that instead of squeezing the compliant tax­payers, the government should encour­age the retailers and facilitate them to the maximum extent by introducing a simpli­fied Tajir Dost Scheme in accordance with the suggestions of LCCI. This will help in broadening of tax base by encourag­ing more retailers to register under this scheme. “For the success of this scheme, it is important that the FBR removes the confusions and ambiguities surrounding it and provides greater clarity, especially regarding the specific tax rates that will be prescribed in the future and whether the scheme applies to existing or new retailers. A detailed briefing about this scheme should be provided by the FBR to the stakeholders”, Kashif Anwar added. He hoped that the suggestions put forth by LCCI will be given due consideration and incorporated into the draft scheme prior to its implementation.

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