The Federal Board of Revenue (FBR) is contemplating a shift in the tax payment system for traders from a monthly to a quarterly basis, according to sources familiar with ongoing discussions between the FBR and traders.

This change will require an amendment to the existing notification.

During the meetings, the FBR is evaluating a new proposal that would require traders to collect advance tax based on the category of businesses in the market. While traders have expressed a preference for paying taxes annually, they are currently required to pay advance tax quarterly. The first installment for the July-September period of the 2024-25 fiscal year is due in October 2024.

The proposed category-wise tax collection is seen as a more efficient alternative to the time-consuming door-to-door market surveys. The FBR plans to identify major business categories, allowing for a fixed advance tax to be applied across different types of businesses. This would streamline the process by determining tax obligations based on business categories.

Additionally, the FBR is considering replacing the monthly fixed tax payment mechanism with a quarterly system, pending necessary amendments to its notification. This change aims to simplify the tax collection process and accommodate the needs of traders more effectively