Key Points
- Estimated coverage: 3–4 million shopkeepers
- Optional registration with benefits including audit exemption
- Minimum payment of Rs 25,000 at filing stage
- Street vendors exempt from scheme
ISLAMABAD: Pakistan’s government on Friday introduced a fixed tax scheme for small traders and retailers as part of efforts to broaden the tax base and bring more informal businesses into the documented economy.
Finance Minister Muhammad Aurangzeb announced the initiative at a press conference alongside Minister of State Bilal Azhar Kayani, saying the reform is designed to make the tax system more transparent and sustainable.
“Our tax system needs to become more transparent and move on a sustainable footing,” said Aurangzeb.
“We need to reduce the tax rate,” the finance minister said, acknowledging that several sectors, including the documented corporate sector and the salaried class, are facing a “disproportionate tax burden”.
He said the new measure targets small retailers, estimated at around 3–4 million shopkeepers. “It is an important milestone in terms of expanding our tax net,” he said.
Aurangzeb also noted that despite geopolitical tensions in the Middle East, the domestic economy remained stable.
“We overcome our challenges via our own resources, and didn’t take assistance from anyone,” he shared.
Explaining the framework, Kayani said the scheme will apply to retailers with annual turnover of up to Rs 200 million, under which a 1 per cent tax will be levied on total sales.
“Withholding Tax (WHT), which is already deducted, will be adjusted in this tax,” said the state minister. “However, at the time of form submission, the retailer will have to pay at least Rs 25,000,” he added.
He described the scheme as optional, adding that participants will receive benefits including exemption from Federal Board of Revenue (FBR) Point of Sale (POS) requirement and audit procedures. “Retailers, including both non-filers and filers, can avail this scheme.”
Kayani warned that retailers who do not register under either the fixed scheme or the standard tax regime will face penalties.
He also confirmed that street cart sellers are excluded from the scheme. He said the policy was developed after consultations with trade associations.
