The government on Friday launched a new fixed tax scheme to bring small traders into the tax net. The initiative targets businesses with annual sales of up to Rs200 million through simplified compliance. Small shop owners, traders, and tax authorities are expected to be directly affected by the move.
Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiani, and FBR official Hamid Attique Sarwar announced the scheme. Named the Fixed Tax Asaan Scheme, it was developed after consultations with trader associations. Officials said the plan responds to demands for an easier and more practical tax compliance system.
Read more: Govt introduces fixed tax scheme for small traders nationwide
Under the scheme, eligible traders will pay a fixed tax of one percent through a simplified filing form. The tax paid can be adjusted against withholding taxes if a minimum payment of Rs25,000 is made. Traders may either join the new scheme or remain under the existing tax regime. Participants will also receive a special registration plaque carrying a QR code.
Moreover, traders joining the scheme will be exempt from Point-of-Sale requirements and routine tax audits. Non-filers and existing taxpayers can participate if their turnover remained below Rs200 million during the past three years. However, traders who stay outside both tax systems could face penalties starting at Rs10,000 per month and rising significantly over time.
Read more: Govt and traders near deal on fixed retailer tax scheme
Officials said around 3.5 million of Pakistan’s 4.4 million traders could qualify for the scheme. Kiosks, pushcart vendors, and larger Tier-1 retailers will remain outside its scope. Authorities expect the initiative to broaden the tax base, improve compliance, and reduce pressure on existing taxpayers ahead of the federal budget for 2026-27.