SEC-S20W4 | My Business Ideas | Registration, License, and Taxes
As I was not a participant in last week engagement challenge that's why I want to make it clear that currently I am running a business of furniture and it is not in growth yet because this is a new business for me so now what about my need for registration of departments of my country Pakistan and what are rules and regulations of government applicable for traders I would like to talk about it.
Departments
• Federal board of revenue is an important department for registration of your tax.
• Currently I have not made my furniture business a big business that's why I don't have any proper company yet but if I have in future soon then I will go for security and exchange commission of Pakistan for registration of my company.
• I will approach local authorities for local or small scale business for now which is at municipal service level.
• When in future I will expand my business at provincial level then I may need provincial departments and authority for provincial level licence which is mainly for large scale business.
Government rules for traders
• For traders there is competition act 2010 for fair competition of traders.
• There are tax laws which are governing income tax, sales tax, federal excise duty etc.
• Similarly labor laws are governing for labour rights and environmental laws are governing for industries pollutants and wastage.
• I have already make it clear that till I don't have a proper company so if I don't have a proper company then it is very definite that my business fall under free trade for now but in future I have plans to expand it and then definitely I will need permission and licensing in future also first at local level and then at provincial level (All depends upon my business growth).
• Personally I don't have experience of registration of my company but definitely when in future I have experience then I would face challenges like delays in my registration due to bureaucrats or due to frequent registration regulation changes as well as corruption is also a major issue that I will face and last but not least, due to lack of resources inspection process would take a lot of time.
• In Pakistan, according to other sector experiences this thing takes a long time because if suppose I am involving any inspector then they will also ask for bribes definitely and then most of the time they also forward incomplete documentation and they have a lot of similar cases to handle that why they also delays processing so this is not a smooth task.
• Normally registration takes 3-7 weeks.
• Licensing takes 6-15 weeks.
• Inspection takes 3-5 weeks.
• I am not applicable to sales of trades tax because it is very clear that I have not registered any company of furniture because this is just start of my business so until all unless I feel myself able to handle this business I will not make a big company.Secondly my annual sale are also less than 10 million PKR that's why I am not eligible.
• In Pakistan, sales tax rates changes depending upon annual sales volume.Now below these are tax slabs;
Tax Slabs (Effective from July 1, 2022)
| Annual Sales (PKR) | Sales Tax Rate (%) |
|---|---|
| Up to 10 million | 10% |
| 10-50 million | 12.5% |
| 50-100 million | 15% |
| 100-500 million | 17.5% |
| Above 500 million | 20% |
• This is clear from above table that my business is not eligible for tax slabs as my sales are not more than current sales because my sales are not even more than 10 million PKR yearly.
• My business is not grown so I am not eligible to tax rebates also as it is a process in which tax can be refund by government for encouraging economy and businesses.
• I will be eligible for it when my business will fall under category of large enterprises and it can be possible only when my yearly turnover is more than 500 million PKR.
• I am very determined about my business and I believe that I can handle my business by my own but in start no one can do it lonely if he is not experienced about his business already so definitely I will seek guidance and help from other professionals if I faith any problem in my business especially related to registration, taxation and licensing. For that I may need lawyers, inspector, accountants etc.
• Under consumer protection act in 1997 consumer court was established in Pakistan which main purpose is to file complaints of consumers against different businesses.
• For resolving dispute between customers and businesses there are consumer courts that definitely gives rights to consumers for their protection.
• 2010 Pakistan competition act was made for promoting fair competition or fair policy for trading but still what I have observed according to that there's is more corruption in every sector of Pakistan almost,sorry to say but that's truth so there's no fair trade if we see logically.
Special invitation to;
• @lunasilver
• @fjjrg
• @sduttaskitchen
• @kuzboy
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