FBR Unveils Fixed Tax Scheme for Small Traders in Pakistan

ISLAMABAD: The Federal Board of Revenue (FBR) has issued a draft framework for a fixed tax scheme designed for small traders operating a single shop with annual turnover of up to Rs200 million. The voluntary regime proposes a 1% tax on gross turnover, simplified return filing and relief from routine audits, while eligible traders will be able to register digitally or through a tax office.

The government expects to generate more than Rs50 billion annually if the proposed scheme is successfully implemented.

Traders will be free to join the fixed tax regime or continue filing regular income tax returns. A minimum cash tax payment of Rs25,000 will be compulsory for participants.

Owners operating multiple shops will not qualify for the scheme. Tier-1 retailers, jewellers and professional service providers have also been excluded.

The FBR has invited objections and recommendations on the draft framework within seven days.

Eligible traders will be able to register through the IRIS portal, the FBR mobile application or their nearest tax office. Qualifying businesses will receive a Green Plate under the proposed system.

FBR officials will not enter Green Plate shops for routine tax matters. Registered traders will also be exempt from installing point-of-sale machines and undergoing routine tax audits.

Participants will be required to disclose their net profit, income from other sources, total taxes paid, immovable property, bank balances, available cash and other assets.

The FBR has also introduced a simplified one-page tax return seeking basic information, including the trader’s business name, address, CNIC, type of business, annual sales, purchases and expenses.

Audits may still be conducted where unusual business activity or significant asset purchases are identified. The FBR also warned that legal action would be taken against traders who misuse the scheme or conceal information.

Source: ARY News