The Federal Board of Revenue (FBR) is set to conduct market-level enforcement to identify retailers who have not registered under the government’s one-percent fixed tax scheme.

FBR officials told the Senate Standing Committee on Finance that the country has an estimated 4.3 million retailers, but only around 600,000 are currently filers. The tax authority plans to bring another 500,000 to 700,000 retailers into the tax system.

FBR Member Hameed Atiq Sarwar said about 200,000 retailers are expected to register voluntarily, while the remaining retailers would be brought into the tax net through enforcement.

Minister of State for Finance Bilal Azhar Kayani said the retailer tax scheme was introduced following consultations with traders over several years. He said registration was mandatory and warned that retailers who remain outside the system could face penalties and enforcement action.

According to Kayani, 10,338 shops have registered under the scheme so far, including 2,337 new registrations. Only 787 of the registered retailers, however, are currently filers.

FBR Chairman Rashid Langrial said the authority had used various measures, including social media campaigns, to encourage registration. He acknowledged that the response had remained below expectations and said enforcement would now be required in certain cases.

Langrial also warned that weak action against retailers who do not comply could make it harder to implement similar tax schemes in the future.

Senator Farooq H. Naek said traders needed more awareness about the scheme and proposed a month-long campaign. He said engaging only trader representatives was not enough to reach retailers across the country.

More Tax Returns Filed

The committee was also informed that around 5.5 million income tax returns had been filed so far this year.

Sarwar said this was about 1.5 million higher than the roughly 4 million returns filed during the corresponding period last year. FBR officials expected the total to reach 6.5 million by the end of the day.

Sarwar also said the non-filer category remains in place, while the late-filer category has been removed.

Senate Staff Allowances

The committee separately examined the issue of special allowances for Senate employees.

AGPR told members that it had received the Supreme Court’s decision concerning the matter.

Committee Chairman Saleem Mandviwalla said other related cases should be sent to the relevant authorities for reconsideration in accordance with the court’s decision. He also questioned whether the ruling applied to Senate employees, noting that it was unclear whether Senate staff had been petitioners in the case.

Senator Farooq H. Naek said Parliament has a distinct institutional structure and should have the authority to determine the salaries and benefits of its employees. He said Parliament could not simply be treated as another government department.

Mandviwalla said the matter did not directly fall under the Finance Ministry or AGPR and suggested that the Senate explore operating outside the AGPR system for matters concerning employee salaries and benefits.

The committee gave the relevant authorities 14 days to resolve the issue.

Refunds Under Process

FBR Chairman Langrial also briefed the committee on tax refunds.

He said some refunds had already been issued while others were being processed. He assured the committee that outstanding refunds would be paid within their stipulated deadlines.