The Federal Board of Revenue (FBR) has issued the draft of a fixed tax scheme for small traders, proposing a simplified taxation system aimed at expanding the country's tax base while reducing compliance requirements.
The proposed scheme applies to shopkeepers and businesses with an annual turnover of up to Rs200 million and invites objections and suggestions from stakeholders within seven days before finalisation.
Under the draft, traders opting for the scheme will pay one percent tax on their total annual turnover, while a minimum tax of Rs25,000 will be payable in cash.
The government estimates the scheme could generate more than Rs50 billion in additional annual revenue if widely adopted.
The proposed tax regime will remain voluntary, allowing eligible traders to either join the fixed tax scheme or continue filing regular income tax returns under the existing system.
However, the facility will not be available to owners of multiple shops, Tier-1 retailers, jewellers or professional service providers.
To simplify compliance, the FBR has also introduced a one-page income tax return form for small traders.
The simplified return requires basic information, including the business name, address, CNIC number, nature of business, annual sales, purchases, expenses, profit, bank balance, available cash and other assets.
According to the proposal, registration under the scheme can be completed through the IRIS portal, the FBR mobile application, or the nearest tax office.
Eligible traders will also receive green registration plates, while participants in the scheme will not be required to install Point of Sale (POS) machines.
The FBR has asked traders, business associations and other stakeholders to submit their feedback within seven days before the proposed scheme is finalised.
