The government on Friday won support from traders for its upcoming tax scheme, which offers a minimum annual tax of Rs25,000 and exempts them from audit and other obligations, raising prospects for the scheme's announcement in the budget.

Kashif Chaudhry, President Central Organis`ation of Traders of Pakistan, demanded a simple tax scheme for traders during a press conference. His demands were in line with the government's planned scheme, which could resolve the decades?old standoff between the trading community and successive governments.

Chaudhry, along with other traders, demanded an easy and simplified tax system for retailers, real estate, agriculture and industries in the upcoming budget. An easy one?page tax return form in Urdu should be introduced for traders, he said. A simple tax scheme should be introduced for traders with annual turnovers up to Rs200 million.

Minister of State for Finance Bilal Azhar Kayani is already working on the simple tax scheme in consultation with traders, including those in Lahore.

The traders demanded that both new and old filers should be allowed to opt into the easy tax scheme. However, the government has made it clear that existing traders can opt for the new scheme but their tax contributions cannot be less than before.

To keep the Federal Board of Revenue (FBR) at a distance, the government will give a tax plate to be displayed at the shop. Chaudhry backed this move while demanding that the FBR should not harass traders who display these plates.

Traders demanded that if they come under the new scheme, they would not install point?of?sale machines and would not be forced to generate digital invoices of sales. Traders under the easy scheme should be exempted from withholding tax deduction, he added.

Under the scheme, traders would not be subject to audits unless the FBR has incriminating evidence of evasion.

The traders sought only 0.25?0.5% of turnover as tax and demanded that they be allowed to adjust withholding taxes deducted on electricity, phone and other bills. Kayani has already taken care of these demands.

Chaudhry also backed the minimum annual tax payment of Rs25,000 by a trader, which would be over and above the adjustable taxes. The FBR would also not make unnecessary inquiries about the properties and vehicles of those who opt for the easy scheme, he said.

He said action on unusual bank account transactions should be taken only after consultation with traders' representatives. A proposal to introduce a system of gradually imposing fines on non?filers and eventually sealing their shops should be finalised with their consultation.

The current definition and conditions of Tier?1 retailers should be reviewed and changed, according to the traders. Point?of?sale should not be made mandatory for traders who accept at least one mode of digital payment.

He said point?of?sale should only be enforced on brand stores and chain stores in air?conditioned malls. The traders also sought a significant reduction in withholding taxes on the real estate sector, lowering it to 1% from 4% for filers.

He said the FBR's property valuations should be cut by at least 40%, and overseas Pakistanis should be given special tax relief on property purchases. The government's scheme would not apply to jewellers.

Chaudhry proposed a reduction in duties on raw material imports and more facilities for industries. The traders said the FBR's raids, arrests and unlimited powers should be curtailed, and government expenses, VIP culture and protocols should be abolished immediately instead of increasing the tax burden.