Only 220 new shopkeepers have entered the tax net under the government's simplified registration scheme for retailers, even though the Federal Board of Revenue (FBR) has identified 3.6 million potential non-filers in the retail sector.
Sources say a total of 1,750 shopkeepers have taken advantage of the scheme so far.
Out of those, just 220 are new filers, while the remaining participants are existing taxpayers.
The program was launched to broaden the tax base and enable the government to collect Rs. 50 billion from retail businesses.
Fines and Shop Sealing for Non-Filers
To draw more retailers into compliance, the FBR intends to geo-tag markets nationwide, building on its existing mapping of shops and markets.
Shop owners who do not register will face rising penalties: Rs. 10,000 in the first month, Rs. 25,000 in the second month and Rs. 50,000 in the third month. Authorities also may seal the premises of retailers who remain outside the tax net.
The sluggish uptake follows earlier data that showed only 91 new retailers had joined the scheme in early October.
Revenue Shortfall Adds Pressure
The weak response arrives as the FBR struggles to hit its revenue goals. In the first 30 days of October, the tax authority collected Rs. 975 billion against a monthly target of Rs. 1,132 billion, leaving a shortfall of Rs. 157 billion.
For the first four months of the current fiscal year (July to October), collections reached Rs. 4,058.5 billion versus a target of Rs. 4,185 billion, creating a gap of Rs. 126.5 billion.
The deadline for filing income tax returns was extended twice this year, and by October the FBR had received 7.6 million income tax returns.
