FBR introduces fixed tax scheme, targets Rs50 billion revenue collection

The Federal Board of Revenue (FBR) has unveiled a new fixed tax scheme aimed at broadening Pakistan’s tax base and improving compliance among small businesses

ISLAMABAD: The Federal Board of Revenue (FBR) has unveiled a new fixed tax scheme aimed at broadening Pakistan’s tax base and improving compliance among small businesses, with authorities expecting to generate approximately Rs50 billion in additional revenue through the initiative.

FBR officials emphasized that the scheme should not be viewed as a tax amnesty program. Instead, they described it as a simplified taxation framework designed to encourage undocumented businesses to become part of the formal economy while reducing compliance burdens for eligible traders.

According to the FBR spokesperson, shopkeepers and small traders with an annual turnover of up to Rs200 million will be eligible to voluntarily register under the scheme. Participants will be required to pay a fixed tax equivalent to one percent of their annual sales. However, a minimum tax payment of Rs25,000 per year will apply regardless of turnover.

The tax authority believes the initiative will encourage greater participation from small businesses by offering several incentives. Traders who opt for the scheme will be exempt from routine tax audits, a move aimed at reducing administrative hurdles and providing certainty regarding tax liabilities. Registered businesses will also be allowed to adjust withholding taxes against their tax obligations.

In another significant concession, the FBR has removed the requirement for participating businesses to install Point of Sale (POS) systems, a condition that had previously faced resistance from segments of the trading community.

Officials clarified that enrollment in the scheme will remain entirely voluntary. Traders who prefer the existing tax framework will continue to have the option of filing conventional tax returns under the standard taxation system.

To improve transparency and public confidence, businesses registered under the scheme will be required to display a designated identification plate outside their premises. The plate will contain a Quick Response (QR) code and the trader’s National Tax Number (NTN), allowing customers and authorities to verify registration details.

At the same time, the FBR has warned that strict enforcement measures will be taken against businesses that conceal actual sales figures, maintain inaccurate records, or violate the scheme’s conditions. Authorities stated that traders found guilty of misreporting turnover or failing to maintain proper accounts could face financial penalties and may be removed from the scheme, resulting in the loss of its associated benefits.