FBR is preparing a new tax scheme for small traders and shopkeepers that is expected to be announced in the federal budget for 2026-27.
The initiative is aimed at encouraging more small businesses to become part of the formal tax system.
According to reports, the proposed scheme will target traders, retailers, and small business owners with an annual turnover of up to Rs. 20 million.
The plan is designed to make tax registration and compliance easier for small businesses that often find existing procedures complicated.
Under the proposed framework, business owners will be able to register through the FBR’s IRIS system, mobile applications, and authorized facilitators.
Officials believe these simplified registration options will make it easier for small traders to join the tax net.
Participation in the scheme is expected to be voluntary. Those who choose to register may benefit from lower tax rates, simplified record-keeping requirements, and a reduced likelihood of being selected for audits, provided they remain compliant with tax rules.
In addition, eligible participants may receive Active Taxpayer List (ATL) status, which offers several advantages, including lower withholding tax rates on various financial transactions.
The FBR hopes the initiative will encourage voluntary tax compliance and improve the documentation of economic activity across the country.
By making tax procedures simpler and more accessible, authorities aim to attract a larger number of small businesses into the formal economy.
Officials believe the proposed scheme could help increase tax collection while reducing the administrative burden on small traders.
If approved in the upcoming budget, it may provide a more business-friendly approach to taxation and support the growth of small enterprises across Pakistan.