LAHORE: The Chainstore Association of Pakistan (CAP) has appealed to the government to retain the 15% GST rate for Integrated Tier-1 Retailers, advocating for the preservation of S. No. 66 in the Sales Tax Act 1990, which faces omission in the proposed Finance Bill 2024. CAP highlighted the effectiveness of FBR-POS integration in enhancing digital taxation efforts nationwide.
In a press release issued today, CAP emphasized the critical role of strategic measures, developed in collaboration with progressive retailers, in fostering economic growth and sustainable tax compliance within the retail sector.
Rana Tariq Mehboob, Chairman of CAP, underscored that Tier-1 Retailers integrated with the FBR-POS system significantly bolster Pakistan’s formal economy. He noted that the sector directly employs over 2,000,000 people and supports numerous ancillary industries.
“Despite efforts to rationalize taxation, recent reforms have forced closures and downsizing among integrated retailers, stifling employment and domestic investment,” remarked Rana Tariq.
CAP argued that maintaining the current 15% GST rate is crucial to sustaining competitiveness within the formal retail sector. The proposed increase to 18% in the Finance Bill 2024, CAP warned, could reverse progress made in digitalization and undermine tax compliance efforts.
The association highlighted past successes of FBR-POS integration, including the promotion of compliance through consumer incentives and digital verification of sales invoices. Recent setbacks, such as easing integration criteria and discontinuing consumer prize schemes, have raised concerns among tax-compliant retailers.
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CAP urged the government to introduce special concessions for FBR-POS integrated taxpayers and discourage punitive measures against Tier-1 retailers committed to compliance.
The debate over GST rates for integrated retailers underscores broader challenges in tax policy and economic strategy, impacting the future of digital taxation in Pakistan’s retail landscape.
