ISLAMABAD: The Federal Board of Revenue (FBR) offers eligible small shopkeepers a voluntary tax scheme charging 1% of annual sales for tax year 2026.
Individuals earning mainly from retail shops qualify if annual turnover does not exceed 200 million rupees, subject to exclusions. Participants must pay at least 25,000 rupees in cash with their return, even after accounting for tax already withheld.
Owners of multiple shops, Tier-1 retailers, jewellery sellers and professional service providers cannot use the scheme. Anyone exceeding the turnover ceiling in any of the preceding three years is also excluded.
Only shop income falls within the procedure. Existing filers cannot reduce their payable tax below the previous year’s amount or split or rename businesses to qualify.
Shopkeepers can register through the IRIS portal or the shopkeepers’ mobile application, or seek assistance at a nearby tax office. A simplified one-page return is available in Urdu and regional languages.
Eligible participants need neither a point-of-sale system nor digital invoicing infrastructure. They are exempt from withholding tax on purchases of goods or services under section 153 of the Income Tax Ordinance, 2001.
General audit relief has exceptions. FBR can initiate proceedings after consulting trade representatives when third-party information indicates unusual transactions, expensive assets or serious misuse of the scheme.
Read: Taxpayers Face Rs25,000 Late-Filing Surcharge in Pakistan
Qualifying shops receive a green compliance plate carrying a quick-response (QR) code for prominent display outside. Officials cannot enter a bona fide participant’s shop for tax matters when the plate is displayed.
For assistance, shopkeepers can call 051 111 772 772 or email helpline@fbr.gov.pk.
(With input from the Federal Board of Revenue)
