The federal government has launched a pilot project of the Tajir Dost Scheme to attempt to bring traders and shopkeepers into the tax net. However, analysts say that the selection of cities seems to have been made on political basis.

The scheme will be piloted in the federal capital Islamabad and provincial capitals Karachi, Lahore, Peshawar and Quetta. The scheme will also include Rawalpindi.

Authorities have justified the peculiar inclusion of Rawalpindi by saying that it is difficult to separate the city’s trade from its ‘twin city’ Islamabad.

However, analysts have told Business Recorder that the selection of cities for the pilot project seems to have been made on political basis.

The analysts added that industrial cities like Faisalabad and Sialkot seemed like more logical targets for the scheme as they contain massive numbers of small traders, shopkeepers and wholesale dealers.

The Tajr Dost Scheme will aim to register traders if they operate from a fixed place of business such as shops, stores and, warehouses.

Those who qualify for the registration will have to pay a minimum advance tax.

The advance tax paid shall be the minimum tax in respect of income from the business covered under this scheme, according to BR.

Trader representatives have also endorsed the government initiative to bring them into the tax net as long as it does not burden them with more taxes.