ISLAMABAD: The Federal Board of Revenue (FBR) has issued the framework for a fixed tax scheme for small traders, allowing owners of a single shop with an annual turnover of up to Rs200 million to benefit from the proposed regime.
According to an FBR notification, the scheme proposes a one percent tax on gross turnover, with the government expecting to generate more than Rs50 billion annually if the initiative is successfully implemented.
The FBR said the scheme will be voluntary, allowing traders to either opt for the fixed tax regime or continue filing regular income tax returns. A minimum cash tax payment of Rs25,000 will be mandatory, while owners of multiple shops will not be eligible. Tier-1 retailers, jewellers and professional service providers have also been excluded from the scheme.
The tax authority has invited objections and suggestions on the draft within seven days. Eligible traders will be able to register through the IRIS portal, the FBR mobile application or the nearest tax office. Under the proposed scheme, qualifying traders will be issued a “Green Plate.”
Under the notification, FBR officials will not enter Green Plate shops for routine tax matters. Small traders registered under the scheme will not be required to install POS machines and will also be exempt from routine tax audits.
The notification further states that participants must provide details of net profit, income from other sources and total taxes paid. They will also be required to disclose immovable property, bank balances, available cash and other assets in the prescribed form.
The FBR has also introduced a simplified one-page tax return form for small traders, requiring information including the business name, address, CNIC number, nature of business, annual sales, purchases and business expenses.
According to the FBR, audits may still be conducted in cases involving unusual business activity or significant asset purchases. The authority warned that legal action will be taken against anyone found misusing the scheme or concealing information, and said it is authorized to act on data received from third-party sources.
