FBR unveils simplified tax scheme for small shopkeepers in TY2026

Eligibility

Individuals mainly earning through a single retail shop with annual turnover up to Rs200m

Nature of scheme

Optional; shopkeeper may opt for this scheme or file a regular income tax return

Tax rate

1% of gross turnover

Minimum payment

Tax payable after withholding adjustment or Rs25,000 in cash, whichever is higher

Excess withholding

Withholding tax may be adjusted, but any excess will not be refunded

Simplified return

A simplified return declaring sales, purchases, expenses, profit and assets will be filed through IRIS or the Shopkeepers' Mobile Application

Withholding exemption

No obligation to deduct tax under section 153 on purchases of goods or services

Minimum tax exemption

Minimum tax under section 113, including the 1.25% rate, will not apply

Audit protection

Generally exempt from audit; proceedings may arise in cases of unusual transactions, expensive assets or gross misuse

POS exemption

No requirement to install a sales tax POS system or digital invoicing infrastructure

Imputable income

Tax paid will provide corresponding imputable income to support personal expenses and accretion of assets

Green Plate

Compliant shopkeepers will receive an FBR QR-coded Green Plate and protection against routine entry by FBR officers for tax matters

Key exclusions

Multiple-shop owners, Tier-1 retailers, jewellery sellers, professionals and persons exceeding the turnover limit in any of the preceding three years

Existing return filers

TY2025 filers may opt only if their tax payable is not lower than TY2025 and the business has not been split or renamed

Non-filing penalties

Rs10,000, Rs25,000 and Rs50,000 for the first, second and third defaults, respectively