The government is preparing to introduce a new fixed tax scheme for retailers in the upcoming federal budget as part of broader efforts to expand Pakistan’s tax base and improve documentation of the retail sector.
Sources within the Federal Board of Revenue (FBR) said the proposed scheme will be implemented nationwide and aims to increase tax compliance among small and medium-sized retailers.
According to officials, the proposal is expected to be presented to the International Monetary Fund (IMF) next week during ongoing discussions on tax reforms and revenue generation measures linked to Pakistan’s economic program.
Under the proposed framework, retailers with annual business turnover of up to Rs. 200 million will be required to register with tax authorities.
Sources said retailers covered under the scheme will pay a fixed tax equal to 1 percent of annual turnover up to the Rs. 200 million threshold.
Officials noted that the entire tax scheme has been prepared in Urdu to make compliance easier for traders and small business owners across the country.
Unlike some earlier taxation proposals, the new framework will reportedly not include the size or area of shops as a basis for determining tax liability.
The government is targeting the registration of nearly three million retailers under the initiative as part of efforts to broaden the country’s tax net and reduce undocumented economic activity.
Officials said tax rates and revenue targets will initially remain relatively low to encourage maximum participation and voluntary registration during the early stages of implementation.
The proposed scheme is expected to become part of the federal budget for the upcoming fiscal year, which is likely to focus heavily on tax reforms and revenue enhancement measures.
