FBR has introduced a new mechanism for a fixed tax scheme designed to support small traders across Pakistan. The initiative is aimed at eligible shop owners with an annual turnover of up to Rs200 million from a single business outlet.
According to an official Statutory Regulatory Order (SRO), the proposed scheme offers traders the option to pay a fixed tax based on one percent of their total annual turnover. The government expects the programme to generate more than Rs50 billion in annual revenue if widely adopted.
The FBR clarified that the scheme is voluntary. Eligible traders may choose to join the programme or continue filing regular income tax returns under the existing tax system. Participants will also be required to deposit a minimum tax amount of Rs25,000 in cash.
However, not all businesses will qualify for the scheme. Owners operating multiple shops, Tier-1 retailers, jewellers, and professional service providers have been excluded from the proposed framework. The initiative is specifically intended to simplify tax compliance for small, single-outlet businesses.
The tax authority has invited traders and stakeholders to submit objections or suggestions on the draft within seven days. After reviewing the feedback, the FBR is expected to finalise the framework before its implementation.
Registration for the scheme will be available through multiple channels. Eligible traders can apply using the IRIS online portal, the official mobile application, or by visiting nearby tax offices. Businesses approved under the programme will receive a special “Green Plate” to display at their shops.
One of the key features of the proposed scheme is reduced regulatory interaction. According to the draft, FBR officials will not enter Green Plate shops for routine tax matters. In addition, participating traders will not be required to install Point of Sale (POS) machines or undergo regular tax audits.
The proposed system also introduces a simplified tax filing process. Traders will be required to provide basic information about their business income, expenses, assets, bank balances, cash holdings, and other financial details. To make compliance easier, the tax authority has prepared a one-page tax return form that includes sales, purchases, and business expenses.
Despite the simplified process, the FBR has made it clear that audits may still take place under certain conditions. These include unusual business activity, major asset purchases, misuse of the scheme, or concealment of information identified through data received from third parties.
The government believes the fixed tax scheme will encourage greater tax compliance among small traders while reducing administrative burdens. By offering a simpler registration process and fewer routine inspections, the programme aims to bring more businesses into the formal tax system.
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The proposal is currently in its draft stage, and final implementation will depend on feedback received from traders and other stakeholders. Once approved, the scheme could provide eligible small businesses with a simpler and more predictable way to meet their tax obligations while supporting broader tax reforms in Pakistan.
