ISLAMABAD: The federal government has launched a new Tax Facilitation Scheme aimed at simplifying tax compliance for small shopkeepers, expanding the tax base and encouraging voluntary registration of retailers with annual turnover of up to Rs200 million.
The scheme was announced by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani and Federal Board of Revenue (FBR) Member Hamid Atiq Sarwar during a joint press conference in Islamabad.
Under the new framework, eligible retailers can join a simplified fixed-tax regime by submitting a one-page declaration form and paying tax equal to one percent of their declared annual turnover.
Officials said the initiative is designed to bring more small businesses into the formal economy while reducing compliance burdens for participating retailers.
Key features of the scheme
According to the government, shopkeepers who opt into the scheme will be exempt from Point of Sale (POS) requirements, routine tax audits and withholding agent obligations.
Taxes already deducted through electricity bills, telephone bills, mobile phone bills and other sources will be adjustable against their tax liability under the scheme.
Participants will also receive an FBR-issued compliance plate displaying the retailer’s name, National Tax Number (NTN), tax year and a QR code for verification purposes.
Officials said FBR personnel would be required to verify the QR code before taking any action related to participating businesses, while routine inspections would generally not be permitted.
Government aims to broaden tax base
Finance Minister Muhammad Aurangzeb said the scheme forms part of broader efforts to create a fairer and more sustainable tax system.
He said the government’s objective is to expand the tax net rather than increase the burden on already documented sectors, including the corporate sector and salaried individuals.
According to officials, Pakistan has an estimated 3.5 million to 4 million small retailers, while only around 440,000 are currently documented within the tax system.
Eligibility and penalties
Bilal Azhar Kayani said the scheme applies to retailers with annual sales of up to Rs200 million.
Participants will be required to submit a simplified declaration form available in Urdu, Pashto, Sindhi and Balochi. A minimum payment of Rs25,000 will be required when filing, regardless of any taxes already deducted at source.
The scheme is voluntary, allowing eligible shopkeepers to either join the fixed-tax regime or continue under the regular taxation system.
Officials also announced penalties for businesses that neither join the scheme nor comply with normal tax filing requirements. The penalties include fines of Rs10,000 in the first month, Rs25,000 in the second month and Rs50,000 in the third month.
Street vendors and pushcart operators will remain exempt from the scheme.
FBR officials said the initiative was developed after consultations with traders’ organizations and is expected to encourage millions of small retailers to become part of the formal tax system.
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