ISLAMABAD: The Federal Board of Revenue has proposed a voluntary fixed tax scheme for small traders, allowing eligible owners of a single shop with annual turnover of up to Rs200 million to pay tax at one percent of gross sales.
The proposed FBR fixed tax scheme is intended to simplify tax filing for small businesses while bringing more traders into the documented economy. The tax authority expects annual revenue of more than Rs50 billion if the scheme is implemented successfully.
According to an FBR notification, traders may choose between joining the fixed tax regime and continuing to file regular income tax returns.
A minimum cash tax payment of Rs25,000 will apply to participants.
Owners of more than one shop will not be eligible. Tier-1 retailers, jewellers and professional service providers have also been excluded from the proposed regime.
FBR Seeks Public Feedback on Draft Scheme
The FBR has invited objections and recommendations on the draft framework within seven days.
Eligible traders will be able to register through the IRIS portal, the FBR mobile application or their nearest tax office.
Traders accepted into the scheme will be issued a “Green Plate” to identify their participation in the simplified tax regime.
Under the proposal, FBR officials will not visit Green Plate shops for routine tax matters.
Registered traders will also be exempt from routine tax audits and will not be required to install point-of-sale machines.
Traders Must Disclose Income and Assets
Participants will be required to provide information about net profit, income from other sources and the total amount of tax paid.
They must also disclose immovable property, bank balances, available cash and other assets in the prescribed form.
The FBR has introduced a simplified one-page return for small traders. The form will seek details including the business name, address, CNIC number, type of business, annual sales, purchases and operating expenses.
Audits Allowed in Exceptional Cases
The notification states that audits may still be conducted where the FBR identifies unusual business activity, major asset purchases or discrepancies in declared information.
The tax authority said it may also act on information received from banks, government departments and other third-party sources.
Legal action may be taken against traders found concealing information or misusing the scheme.
The framework remains a draft and will be finalised after the consultation period and consideration of public feedback.
Also Read: Budget 2026-27: FBR prepares simplified tax scheme for small traders
Today's E-Paper