FBR Fixed Tax Scheme for Small Traders Announced: Who Can Apply and What It Offers

The FBR Fixed Tax Scheme for Small Traders has officially been introduced, offering a simplified tax system for eligible businesses across Pakistan. The Federal Board of Revenue (FBR) has issued the draft procedure for the scheme, which is aimed at encouraging tax compliance while reducing the burden on small retailers.

Under the proposed scheme, owners of a single shop with an annual turnover of up to Rs. A total of 200 million (20 crore) people will be able to register. The government hopes the project will produce over Rs. 50 billion in annual tax revenue if implemented successfully.

1% Tax on Annual Turnover

The notification states that the FBR Fixed Tax Scheme for Small Traders aims to impose a tax of 1% on gross annual turnover. The scheme is voluntary in nature, with traders allowed to choose to either join the fixed tax regime or remain on the regular income tax system.

However, firms opting for the scheme will have to pay at least Rs. 25,000 in cash.

Who Is Eligible for the FBR Fixed Tax Scheme?

The scheme is available only to traders who meet the following conditions:

• Own a single business or shop.
• Have an annual turnover of up to Rs. 200 million.
• Register through the FBR’s approved channels.

Businesses that will not qualify include:

• Owners of multiple shops.
• Tier-1 retailers.
• Jewelers.
• Professional service providers.

Registration Process

Eligible traders can register through:

• The IRIS Portal.
• The FBR Mobile App.
• Their nearest FBR Tax Office.

The FBR has also invited objections and suggestions on the draft scheme within seven days before final implementation.

Green Plate for Registered Traders

One of the key features of the FBR Fixed Tax Scheme for Small Traders is the issuance of a Green Plate to registered businesses.

According to the notification, traders displaying the Green Plate will receive several benefits, including:

• No routine visits by FBR officers for tax matters.
• No requirement to install a Point of Sale (POS) machine.
• Exemption from routine tax audits.

These incentives are intended to make tax compliance easier for small businesses.

Simplified One-Page Tax Return

The FBR has introduced a one-page tax return form for traders joining the scheme. Applicants will need to provide:

• Business name.
• Business address.
• CNIC number.
• Nature of business.
• Annual sales.
• Annual purchases.
• Business expenses.

In addition, traders must disclose:

• Net profit.
• Income from other sources.
• Total tax paid.
• Immovable property details.
• Bank balances.
• Cash in hand.
• Other assets.

FBR Warns Against Misuse

The FBR has indicated that the businesses engaged in unorthodox commercial activity or huge assets acquisition deals can still be audited. The authority also said that it would severely punish traders who use the scheme or conceal information to evade taxes.

The FBR will also have the authority to check taxpayer information with third party data to ensure compliance.

The Fixed Tax Scheme for Small Traders is meant to ease the tax burden for eligible businesses and to widen the tax base in Pakistan. The scheme, once implemented, would benefit small traders, who would find the compliance burden, returns process and routine audit and POS requirements easy to manage.