The Federal Board of Revenue (FBR) expects to generate Rs50 billion in revenue through its newly announced fixed tax scheme for small traders, which is being introduced as part of broader tax proposals for the 2026-27 budget.
According to FBR officials, the initiative is not a tax amnesty scheme but an effort to expand the tax base, document the economy and encourage voluntary tax compliance among small businesses.
Under the scheme, small shopkeepers with annual sales of up to Rs200 million will be eligible to participate. Registered traders will pay a fixed tax of one percent on their annual sales from July 1.
However, FBR has made it mandatory for participants to pay a minimum annual tax of Rs25,000 regardless of turnover calculations. Officials estimate that the scheme could contribute approximately Rs50 billion in additional revenue.
Scheme designed to broaden tax net
FBR officials emphasized that the scheme should not be viewed as a tax amnesty.
According to the tax authority, the primary objective is to bring more traders into the formal economy and expand the country's tax net. The scheme is being introduced as part of ongoing work on tax proposals for the upcoming federal budget.
To encourage participation, traders joining the scheme will receive several compliance-related benefits.
According to the FBR, participants will be exempt from regular tax audits. They will also be allowed to adjust withholding tax under the scheme, providing additional convenience for registered businesses.
Another major relief measure is the removal of the requirement to install a Point of Sale (POS) system.
Participation will remain voluntary
FBR clarified that the fixed tax regime will be optional rather than mandatory. Traders who prefer the existing taxation framework will still be able to file conventional tax returns under the normal system.
Officials believe this flexibility will encourage wider participation among small businesses and unregistered traders.
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As part of efforts to improve documentation, FBR will install identification plates carrying QR codes and National Tax Numbers (NTNs) outside registered shops.
The move is intended to improve transparency and help identify businesses participating in the fixed tax scheme.
Strict action planned against violations
FBR officials warned that strict action will be taken against traders who conceal actual sales figures or fail to maintain proper accounts. Authorities said businesses found violating the rules will face penalties and fines.
In addition, any trader found breaching the scheme's conditions could lose the benefits and facilities provided under the program.
Islamabad Chamber welcomes initiative
The Islamabad Chamber of Commerce and Industry (ICCI) welcomed the introduction of the fixed tax scheme. ICCI President Sardar Tahir Mahmood said the initiative would help widen the tax net and contribute to a more documented economy.
He expressed support for measures that encourage voluntary tax payments and bring small traders and unregistered businesses into the formal sector.
Business community sees economic benefits
According to Sardar Tahir Mahmood, the scheme could increase government revenues without placing an additional burden on existing taxpayers. He stressed that a broader tax base is essential for Pakistan's fiscal stability and long-term economic sustainability.
The ICCI president also praised the government's business-friendly reforms and called for the removal of unnecessary regulatory hurdles affecting businesses.
Mahmood emphasized the need for further reforms to strengthen private sector growth and boost investor confidence. He also called for greater incentives for industry, trade and exports in the upcoming federal budget.
The business community, he said, is ready to cooperate with the government in promoting a documented economy and supporting national development.
With the new fixed tax scheme expected to take effect from July 1, the government hopes to bring thousands of small traders into the formal tax system while increasing revenue collection and improving economic documentation across the country.
