The government is preparing to impose fines of up to Rs. 50,000 on retailers who failed to register under its Easy Tax Scheme, as it moves towards enforcement following a weak response to the initiative.
Minister of State for Finance Bilal Azhar Kayani told the National Assembly Standing Committee on Finance on Tuesday that the registration deadline had expired on October 31 and the government would now take action against unregistered retailers and those who failed to file income tax returns.
He said the government had initially given traders the option to join either the regular tax system or a simplified tax arrangement. Although some retailers registered, participation remained far below expectations.
Under the proposed penalty structure, retailers would face fines of Rs. 10,000 in the first month, Rs. 25,000 in the second month and Rs. 50,000 in the third month.
Kayani said traders had agreed to these penalties during consultations with their representatives while the scheme was being developed. He added that the government had accepted the business community’s major demands to encourage more retailers to enter the tax system.
The minister said the government had also collected information about retailers through commercial electricity meters installed by power distribution companies (DISCOs). This data indicated that approximately 3.5 million shopkeepers were operating across Pakistan.
Easy Tax Scheme Gets Limited Response
Committee Chairman Syed Naveed Qamar questioned the scheme’s performance, recalling that the government had initially expected around 80 percent of retailers to register.
He said the government needed to explain how it planned to enforce registration requirements and bring unregistered traders into the tax system.
Kayani assured the committee that a comprehensive enforcement plan would be presented within a few days.
The minister acknowledged that tax noncompliance had become widespread in Pakistan, while many traders remained reluctant to register with the Federal Board of Revenue (FBR) because they feared additional scrutiny.
The scheme has attracted a limited number of participants. Only around 1,750 shopkeepers have registered, including approximately 220 new traders who entered the tax net under the initiative.
This is significantly below the FBR’s estimated 3.6 million potential non-filers in the retail sector.
The government had launched the initiative to expand the tax base and generate Rs. 50 billion in revenue. The FBR reportedly aimed to bring between 200,000 and 500,000 retailers into the formal tax system.
The proposed enforcement measures now signal a shift towards penalties after the simplified registration drive failed to attract the expected number of retailers.
