Pakistan Announces Fixed Tax Scheme for Small Shopkeepers – 1% Tax Plan Introduced for Small Traders

The federal government of Pakistan has officially announced a Fixed Tax Scheme for small shopkeepers and retailers, aiming to simplify the tax system for small businesses and expand the tax net in the country.

The authorities shared details in a press conference along with the finance minister Muhammad Aurangzeb that the new scheme has been introduced as a result of consulting with trader associations and their long-standing demands.

Fixed Tax Scheme for Small Shopkeepers in Pakistan

Under the newly proposed small traders tax scheme in Pakistan, shopkeepers whose annual sales are Rs. It will be under the fixed tax regime for 200 million or less. The government has reduced the rate of tax on turnover to 1%, which is a fixed rate, and has made it much easier for small businesses to satisfy tax requirements.

If any withholding tax has been deducted, it will be adjusted against the final tax liability, which ensures no double taxation.

Minimum Tax Requirement of Rs. 25,000

Under the new policy, minimum tax liability is to be paid at the rate of Rs. 25,000 will be applicable for small shopkeepers. However, businesses with higher turnover will pay tax based on the same 1% rate of their declared sales.

This move is anticipated to bring clarity and predictability to the tax regime for retail enterprises in Pakistan.

One-Page Simplified Tax Return Form

One of the key features of this Pakistan fixed tax scheme 2026 is simplicity. The government will present a 1-page tax return form that only will require the shopkeeper to declare their total sales.

This will make the process less cumbersome, more straightforward and will help more small traders join the formal market, officials said.

Objective of the New Tax Policy

The government aims to:

• Bring small retailers into the tax net
• Reduce tax evasion in the retail sector
• Simplify tax filing for small businesses
• Improve documentation of Pakistan’s economy

The scheme is expected to be implemented after final approvals and consultations with stakeholders.