KARACHI: The Federal Board of Revenue (FBR) has finalized a new tax scheme tailored for shopkeepers and small traders, with an official announcement expected in the upcoming Federal Budget 2026-27. According to sources, consultations with various stakeholders are currently underway. The proposed scheme aims to document the economy and encourage voluntary tax compliance through simplified procedures and incentives.
Regarding the eligibility criteria, traders with an annual turnover of up to Rs. 20 million will be eligible, and individuals who have been running their business for at least 3 years can participate. Enrollment in this scheme will be completely voluntary and can be done easily via the Iris portal, a dedicated mobile app, or designated tax facilitators, though maintaining accurate financial records will remain mandatory for all participants.
The scheme proposes relatively low and simplified tax rates for eligible traders, ensuring that tax is only payable on income that exceeds the specified threshold. Under these guidelines, participants will generally be exempt from routine audits, except in cases of unusual financial activity or income discrepancies. Furthermore, traders will only need to maintain simple records of their sales, purchases, and expenses, while certain small businesses are also likely to be exempted from mandatory Point of Sale (POS) and digital integration.
Traders who become active taxpayers under this scheme will enjoy significant perks, such as inclusion in the Active Taxpayers List (ATL), lower withholding tax rates, and an improved financial credibility status. However, the FBR has warned that strict penalties will be imposed for violating regulations, concealing income, or failing to file returns, adding that all bank transactions must strictly align with the declared income and business activities.
