Govt announces fixed tax scheme for small shopkeepers

ISLAMABAD: The government has announced a fixed tax scheme for small shopkeepers aimed at simplifying the tax system and improving compliance, officials said on Friday.

Finance Minister Muhammad Aurangzeb, speaking at a press conference, said the initiative has been introduced in consultation with small traders and on their demand, adding that taxpayers seek greater ease in tax procedures.

Minister of State for Finance Bilal Azhar Kayani said the scheme will apply to shopkeepers with annual sales of Rs 20 crore or less.

He said participating traders will submit sales details through a one-page form. A minimum payment of Rs 25,000 in cash will be required, while an additional 1% tax will be applied based on turnover. The scheme includes a fixed 1% tax component, and any previously deducted withholding tax will be adjustable.

Kayani said the initiative has been developed in consultation with trader associations and will be open to all shopkeepers willing to participate by submitting the prescribed form.

He added that businesses enrolled in the scheme will be issued a plate by the Federal Board of Revenue (FBR), displaying the shop’s name, owner details and other information.

The scheme will be available to both filers and non-filers, he said.

According to Kayani, eligibility requires that participants’ tax payment should not be less than the previous year’s level. Shopkeepers joining the scheme will also be exempt from the point-of-sale (POS) system requirement.