FBR introduces optional fixed-tax scheme for small shopkeepers

The Federal Board of Revenue has introduced a special fixed-tax procedure for small shopkeepers with annual turnover of up to Rs200 million for tax year 2026, reported 24NewsHD TV channel Tuesday.

Under the scheme, eligible retailers will pay tax at the rate of 1% of their gross annual turnover. However, participating shopkeepers will be required to deposit at least Rs25,000 in cash with their income tax return, or pay the higher amount where their calculated liability exceeds the minimum payment.

The scheme is voluntary, allowing eligible shopkeepers either to opt for the simplified procedure or continue filing a regular income tax return.

The notification said the facility would not be available to people who own more than one shop, Tier-1 retailers, jewellery sellers or providers of professional services, including doctors, engineers and lawyers. Individuals whose turnover exceeded Rs200 million during any of the preceding three years will also be excluded.

Shopkeepers may register through the FBR’s IRIS portal, the designated mobile application or by visiting their nearest tax office.

Those opting for the scheme will be required to submit a simplified return containing details of annual sales, purchases, business expenses, net profit, other income and tax paid. They must also disclose business capital, immovable property, bank balances, cash in hand and other assets.

Eligible shopkeepers will not be required to install point-of-sale machines or digital invoicing systems. They will also generally remain exempt from tax audits, although proceedings may be initiated in cases involving unusual transactions, expensive assets or suspected misuse of the scheme.

The FBR will issue a QR-coded “Green Plate” to compliant shopkeepers. The plate will display the trader’s name, National Tax Number and business address and must be placed prominently outside the shop.

The notification also introduces penalties for traders who neither file a regular return nor join the special scheme by the due date. The penalties have been set at Rs10,000 for the first default, Rs25,000 for the second and Rs50,000 for the third.