What happened
The government on Friday unveiled a new optional tax regime, the “Fixed Tax Asaan Scheme”, for small traders and shopkeepers with annual turnover of up to Rs200 million, as it moves to widen the tax base ahead of the federal budget.
The announcement was made in a recorded video message by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kayani and Federal Board of Revenue (FBR) member Hamid Attique Sarwar.
Under the scheme, a flat tax of 1 per cent is payable through a simplified form to be made available in all local languages. Finance Minister Aurangzeb said the amount payable would be adjustable against withholding tax already paid, provided a minimum of Rs25,000 is deposited when the return is filed. Otherwise the standard 1 per cent rate applies.
Mr Kayani, who led the government’s negotiations with trader bodies, said the regime would be optional, allowing traders to join it or remain in the normal tax system. Those opting in would be issued a plaque for display at their premises carrying their name, registration number and National Tax Number (NTN), along with a QR code.
“A tax inspector would be able to scan the QR code on the plaque and, if it is found to be genuine, would not be permitted to enter the premises for tax-related inspections,” he said.
Participants would be exempt from the Point-of-Sale (POS) requirement and from audits, and any dispute would be resolved in consultation with the relevant traders’ association, he added. Kiosks and pushcart-based traders are excluded.
Who is covered
FBR member Sarwar said there are around 4.4 million traders in the country, of whom about 3.5 million would fall under the new scheme. Larger traders classified as Tier-1, mostly in the branded sector and estimated at between 50,000 and 100,000 businesses, would not be eligible.
Both non-filers and existing filers can join, provided turnover did not exceed Rs200 million in any of the preceding three years and the minimum tax payable is higher than what was paid the previous year. Officials said eligibility requires at least three years of business operations, a physical business premise and engagement in non-specialised commercial activity.
Traders outside both the fixed scheme and the normal regime would face penalties of Rs10,000 for the first month, Rs25,000 for the second and Rs51,000 for the third. Registration is to be available through the FBR website, mobile applications or tax practitioners. Participants gain Active Taxpayer List status, lower withholding tax rates and improved financial credibility, the government said.
Why it matters
The scheme follows the Tajir Dost Scheme launched a year ago, which officials acknowledged had struggled to broaden the tax base. Mr Kayani said the new design reflected lessons from past initiatives and “would be successful this time”. Mr Sarwar said most traders covered by the scheme currently pay little or no tax, and stressed that it should not be described as an amnesty.
Pakistan’s tax-to-GDP ratio of around 10 per cent is among the lowest in the region, and the International Monetary Fund, which backs a $7 billion programme, wants it raised to at least 13 per cent. The development comes ahead of the FY2026-27 federal budget, scheduled for presentation on 10 June and expected to be prepared under close IMF oversight. KhabarWire reported the government’s plan to let a broad set of tax exemptions lapse here.
Sources & reporting notes
This is a summary of published reporting and official statements, not independent reporting. Details and quotations are as carried by the cited sources, which were reviewed on 2026-06-05.
- Dawn — "Govt launches scheme to bring small shop owners into tax net"5 June 2026 · Reports the scheme, its terms, the plaque and QR code, exemptions and the FBR figures.
- Pakistan Today — "Govt unveils fixed tax regime for small traders, shopkeepers ahead of budget"5 June 2026 · Carries the ministerial statements, penalties and the budget timing.
- Reuters — "Pakistan to impose 1% tax on retail sales up to 200 million rupees"5 June 2026 · Reports the rate, the number of retailers covered and the IMF context.
