PTBP Web Desk

The federal government is preparing to introduce a new fixed tax scheme for retailers in the upcoming Budget 2026-27 as part of broader efforts to expand Pakistan’s tax base and improve documentation of the retail sector.

According to sources within the Federal Board of Revenue, the proposed scheme will apply nationwide and aims to bring millions of retailers into the formal tax net through a simplified taxation system.

Officials said the proposal will be presented to the International Monetary Fund next week during ongoing discussions on tax reforms and revenue generation measures linked to Pakistan’s economic program.

Under the proposed framework, retailers with an annual turnover of up to Rs. 200 million will be required to register with tax authorities. These businesses will pay a fixed tax of one percent on their annual turnover.

Unlike previous taxation proposals, the new scheme will not consider shop size or business area when determining tax liability. Authorities believe this simplified structure will make compliance easier for small traders and shopkeepers.

FBR officials revealed that the entire tax scheme has been prepared in Urdu to ensure better understanding among retailers across the country. The government hopes the move will encourage voluntary registration and improve trust between traders and tax authorities.

The government is targeting the registration of nearly three million retailers under the new framework. Officials added that tax rates and collection targets will remain relatively low during the initial phase to maximize participation and documentation of the retail economy.

The initiative reflects Pakistan’s continued efforts to increase tax collection without imposing heavy additional burdens on already documented sectors of the economy.