Another scheme for traders

IN the backdrop of failure of almost all such schemes launched in the past, the Government, on Friday, announced the launch of a small trader scheme requiring businessmen to pay a fixed 1% tax on sales in return for exemptions from tax audits and requirements related to digital transaction systems, with officials projecting annual revenue of Rs.50 billion. Finance Minister Muhammad Aurangzeb unveiled the scheme at a press conference alongside Minister of State for Finance Bilal Azhar Kayani, who described the initiative as a “win-win solution” for the government and small-scale traders. Small traders and retailers are considered to be one of the largest segments of the society that remain effectively out of the tax net and efforts of the successive governments to document the economy and make them pay even a token tax met with strong resistance. Last year as well, the Government tried to realize this objective by introducing ‘Tajir Dost’ (trader friendly) scheme but this too met the same fate because of the pressure tactics and stiff opposition of the trading community. The salient features of the schemes, as announced by the two ministers, do not spark confidence of any major success in realizing the dream of tax-compliance. In the first instance, the scheme will be applicable to those with an annual turnover of Rs. 200 million but the question arises how correct assessment is possible in the absence of documentation, which has apparently been granted to traders under the scheme. It is known to everybody that even kiosks and small eateries in Islamabad and major cities, besides street shops, earn more than the salary of a grade-20 officer but a majority of them are non-filers. The Government claims it took representatives of the small traders on board in devising the new scheme but the terms and conditions of the scheme indicate the business community secured major concessions without any surety that the national kitty will receive due taxes from them. The scheme w