FBR proposes voluntary tax regime for small traders

ISLAMABAD: The Federal Board of Revenue (FBR) has proposed a simplified and voluntary income tax regime for small shopkeepers, offering exemption from routine audit, withholding tax obligations and mandatory digital invoicing in a fresh attempt to broaden the country’s narrow tax base.

The draft Special Procedure for Small Shopkeepers, issued on Tuesday, will be finalised within one week after objections and suggestions from the public.

Under the proposal, individual retailers with an annual turnover of up to Rs200 million will have the option of paying income tax equal to one per cent of their gross turnover instead of filing returns under the normal taxation regime.

However, participating retailers will have to pay a minimum cash tax of Rs25,000 even if taxes already deducted at source exceed their liability. Any excess withholding tax will not be refundable.

The proposal offers exemption from audit and digital invoicing

The proposal offers exemption from audit and digital invoicing

The scheme will remain optional, allowing eligible shopkeepers either to join the simplified regime or continue filing regular income tax returns under the existing law.

Registration will be available through the FBR’s IRIS portal, a dedicated mobile application, or at tax offices.

The proposed procedure excludes retailers whose turnover........

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