FBR introduces special 1% tax scheme for small shopkeepers

ISLAMABAD: The Federal Board of Revenue (FBR) has unveiled a special tax scheme aimed at facilitating small shopkeepers, allowing eligible traders to pay a reduced income tax rate of 1 percent on their business income.

Under the proposed scheme, shopkeepers with an annual turnover of up to Rs200 million will be eligible to benefit. However, participants will be required to pay a minimum annual tax of Rs25,000 and register through the IRIS portal, FBR mobile application, or designated tax offices.

Traders enrolled in the scheme will be exempted from undergoing tax audits, with investigations being carried out in case of any suspicion regarding tax evasion or peculiar financial dealings.

To simplify the process, FBR would also arrange for the filing of income tax returns through an easy-to-use system that would be in Urdu and other local languages.

In addition, the scheme provides that the traders will be exempted from withholding tax deduction under section 153. There is also no need for the installation of a POS system and invoicing requirements for the participants in the scheme.

It was revealed that eligible traders will be provided with a special “green plate” that will have a QR code, NTN, and other information. The FBR officials will not be permitted to inspect the business establishments displaying green plates without any valid reason.

The tax authority stated that those having annual sales above Rs200 million, traders owning more than one shop, Tier-1 traders, jewellery traders, and certain professionals will not be allowed to enroll in the scheme.

The FBR has invited traders, businessmen, and citizens to give their suggestions and objections against the scheme within seven days.