ISLAMABAD: Pakistan Anjuman-e-Tajiran has strongly opposed the proposed Asan Tax Scheme for retailers and shopkeepers, arguing that the new tax regime could result in double taxation and place an additional burden on the business community.
Muhammad Naeem Mir, a leading representative of traders and Chief Coordinator of the Tajir Dost Scheme, has urged Prime Minister Shehbaz Sharif to review the proposed taxation framework being considered for the Federal Budget 2026-27.
In a letter addressed to the prime minister, Mir questioned the need for introducing a new tax system when advance taxes are already being collected from wholesalers, distributors, and retailers under Sections 236G and 236H of the Income Tax Ordinance, 2001. He maintained that imposing another tax mechanism would effectively increase the tax burden on businesses already struggling with high operating costs and economic uncertainty.
According to Mir, provincial governments are already collecting multiple taxes and levies, while the Federal Board of Revenue (FBR) continues efforts to expand revenue collection. He said that increasing tax pressure on traders to compensate for revenue shortfalls would create further difficulties for small and medium-sized businesses.
The traders’ leader emphasized that advance taxes are already collected throughout the supply chain. Under Section 236G, advance tax is charged on purchases made by distributors, dealers, and wholesalers from manufacturers and commercial importers. The tax rate stands at 0.1 percent for active taxpayers and 2 percent for non-filers.
Similarly, under Section 236H, advance tax is collected on sales made to retailers by manufacturers, commercial importers, distributors, and wholesalers. Filers are charged 0.5 percent, while non-filers pay 2.5 percent.
Mir argued that the FBR should utilize data generated under these provisions to identify unregistered retailers and enforce return filing requirements instead of introducing another registration-based tax scheme. He claimed that the revenue potential from Sections 236G and 236H is significantly higher than the estimated collections expected from the previously launched Tajir Dost Scheme.
The objections come after Minister of State for Finance Bilal Azhar Kayani held consultations with representatives of the trading community regarding a simplified tax regime for retailers in the upcoming Budget 2026-27. However, Muhammad Naeem Mir declined to attend the meeting in protest, stating that there was no justification for launching another scheme after the limited success of previous initiatives.
He further warned that the introduction of a new tax framework could lead to increased interaction between traders and tax officials, potentially creating disputes and compliance challenges in the retail sector. According to him, traders and shopkeepers already contribute taxes through withholding mechanisms and income tax returns and should not be subjected to additional financial pressure.
If implemented, the proposed Asan Tax Scheme could increase documentation requirements for retailers and bring more businesses into the formal tax net. However, trader organizations fear that it may also raise compliance costs, increase tax liabilities for small businesses, and create concerns over double taxation where taxes are already being collected through existing withholding provisions.
The government is expected to finalize its taxation proposals in the coming days as preparations for the Federal Budget 2026-27 enter the final stage.
