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Aftab Maken
ISLAMABAD: Federal Minister for Finance and Revenue Muhammad Aurangzeb on Wednesday formally launched a special Fixed Tax Scheme for small shopkeepers, assuring the trading community that they would not be harassed under the new mechanism.
Addressing a joint press conference along with Minister of State for Finance Bilal Azhar Kayani, the finance minister said the scheme had been developed in close consultation with trader bodies and represented a long-standing demand of the business community for a simple and easy tax compliance system. Representatives of traders’ associations were also present on the occasion.
The minister said the government had engaged with traders on multiple occasions in the past as well, and expressed confidence that the new scheme would be well received. He said the Federal Board of Revenue (FBR) and the Pakistan Revenue Automation Limited (PRAL) had worked to ensure the process remained simple for small shopkeepers.
“Traders should rest assured that they will not be harassed,” the minister said, adding that no tax system could function effectively if any segment of society remained outside its ambit.
Giving further details, Minister of State Bilal Azhar Kayani said small shopkeepers would be able to file their tax returns through a dedicated mobile application, with tax payments also made via mobile phone. He said the scheme would exempt eligible shopkeepers from the requirement of installing Point-of-Sale (POS) machines, and that compliant traders would be issued a green identification plate carrying a verified QR code.
He said no FBR official would be permitted to enter a shop displaying the green plate, and that shopkeepers under the scheme would need to deposit a minimum of Rs25,000 at the time of filing their tax returns.
Scheme details
According to an FBR notification on the Special Procedure for Small Shopkeepers for Tax Year 2026, the scheme applies to individual shopkeepers with an annual turnover of up to Rs200 million, provided this threshold was not exceeded in any of the preceding three tax years. Eligible traders will pay one percent tax on their annual turnover, with previously deducted withholding tax adjustable against this liability.
The scheme is limited to owners of a single shop; retailers with more than one outlet, Tier-I retailers, jewellers and professionals such as doctors, engineers and lawyers are excluded. Participation in the scheme is voluntary, and traders may choose to remain in the existing tax regime instead. Failure to file returns or opt into the scheme by the prescribed date may attract a penalty ranging between Rs10,000 and Rs50,000.
Officials say the initiative is aimed at bringing an estimated three to four million small shopkeepers across the country into the formal tax net, with the backing of Prime Minister Shehbaz Sharif. Aurangzeb has previously said the government’s broader tax policy focuses on widening the tax base rather than raising rates, in order to ease the burden on existing taxpayers.
Mixed reaction
Reaction to the scheme has not been uniformly positive. The Pakistan Tax Bar Association (PTBA) had earlier written to the finance minister raising legal and procedural concerns over the Fixed Tax Scheme, seeking clarity on aspects of registration and implementation. On social media, while many traders and users welcomed the simplified compliance process, some questioned whether the “no harassment” assurance would hold up at the field level, citing past instances where similar assurances were not consistently honoured by field officials.
The government had earlier introduced the Tajir Dost Scheme to expand the tax net among traders, which officials acknowledge fell short of its documentation targets, prompting the rollout of the current Fixed Tax Asaan Scheme as a revised approach.
