The federal government has introduced a fixed tax scheme for small retailers, imposing a one percent tax on annual retail sales worth up to Rs200 million to widen the tax net.
Finance Minister Muhammad Aurangzeb announced the scheme on Friday, accompanied by Minister of State for Finance Bilal Azhar Kayani, at an official briefing.
Aurangzeb stated that the tax system in Pakistan must become more transparent and operate on a sustainable footing to ensure long-term fiscal stability.
He acknowledged that the documented corporate sector and salaried class currently bear a disproportionate tax burden, stressing the need to reduce overall tax rates significantly.
The minister said the scheme targets approximately three to four million small shopkeepers, calling it an important milestone in the tax net expansion efforts of the country.
Bilal Azhar Kayani explained that the scheme applies to retailers with annual turnovers of Rs200 million or less, with a one percent tax levied on total annual turnover.
Withholding tax already deducted will be adjusted against this fixed tax, though retailers must pay a minimum of Rs25,000 at the time of form submission.
The scheme is optional for retailers, offering benefits including exemption from the Federal Board of Revenue point-of-sale requirement and exemption from audit proceedings.
Both filers and non-filers are eligible to register under the scheme, broadening access to the simplified tax arrangement across different retailer categories.
Retailers who fail to register under either the fixed tax scheme or the normal tax regime will face penalties, the state minister warned during the briefing.
Street cart vendors remain fully exempt from the scheme, while its design followed extensive consultations with trade associations representing the retail sector across Pakistan.
