The federal government has launched the Fixed Tax Asan Scheme mobile app to include small traders and shopkeepers in the tax system. With the new facility, eligible traders will be able to register, file returns and pay taxes through mobile phones.
Minister of State for Finance Bilal Azhar Kayani introduced the app along with Finance Minister Muhammad Aurangzeb and trader representatives. The government has consulted trader organizations in preparing the project.
The Fixed Tax Asan Scheme is for traders whose annual sales are up to Rs 200 million. Existing filers can also opt for this system by fulfilling the conditions.
The new app has a simple form in Urdu. Traders can complete the registration and obtain a PSID. After that, they will be able to pay taxes through mobile phones.
Under this scheme, the basic tax calculation will be at one percent of the declared annual sales. The government has fixed the minimum tax limit at Rs 25,000. Withholding tax will also be included in the calculation.
A separate condition has been imposed for existing filers. Sales in any year in the last three years should not exceed Rs 200 million. Their minimum tax will be equal to the amount due in the previous year.
An important aspect of this scheme is business facilitation. Registered traders will not be required to install a point-of-sale machine. They will also not be required to become a withholding agent.
The government will also provide digital plates to registered shopkeepers. Those who register within the prescribed tax filing period will get a physical plate free of charge. Later, its price may go up to about Rs 1,500.
The app is currently available in Urdu. The government has announced to provide the facility in other languages including Pashto, Balochi and Sindhi by the first week of September. Availability on the Apple Store is also expected in the coming days.
According to the federal government, the aim of this scheme is not only to collect additional taxes. The main goal is to bring businesses that are not yet fully included in the tax net into the documentary system. Pakistan’s tax-to-GDP ratio has also been at a low level for a long time.
Finance Minister Muhammad Aurangzeb said that small business owners need a simple procedure instead of a complex tax system. The government says the new scheme has been designed keeping this need in mind.
The new facility is also different from previous tax efforts introduced for traders. This time, the government has focused on fixed taxes, easy filing and limited administrative requirements. The aim is to encourage traders to join the tax system.
However, the success of the scheme will not be proven by launching the app alone. The real test will be registration, accurate business data and consistent tax payments.
In the past, efforts to bring traders into the tax net have faced limited participation. The new fixed tax scheme has also come up against this backdrop.
This time, the government has involved trade organizations in consultation and implementation. This approach can help reduce traders’ concerns. However, the FBR needs to adopt a transparent and facilitating approach to maintain trust.
From an economic perspective, a broad tax base is important for the government. With more businesses coming into the formal system, tax collection will also create a better record of economic activities. International financial institutions have also been emphasising broadening the tax base in Pakistan.
If the government ensures effective guidance and transparent monitoring along with easy filing, the new app can improve tax compliance for small traders. However, the long-term success will be decided by the practical participation of traders and the actual tax revenue generated from the scheme.
