Govt launches 1% fixed tax scheme for small shop owners

The federal government on Friday announced a voluntary fixed-tax scheme for small shop owners, imposing a 1% tax on net business income as part of efforts to expand the tax base.

Finance Minister Muhammad Aurangzeb announced the Asaan Scheme at a press conference alongside Minister of State for Finance Bilal Azhar Kiani. The scheme is aimed at small shops with an annual turnover of up to Rs200 million and is expected to cover between three million and four million shop owners.

The finance minister said the initiative had been developed following consultations with traders’ associations and in response to demands from shop owners.

Both existing tax filers and non-filers will be eligible to register under the scheme.

Bilal Azhar Kiani said filers could join provided their business turnover had not exceeded Rs200 million during the previous three years.

Kiosks will remain exempt from the scheme.

Shop owners will be able to register through a form available in multiple local languages.

Businesses joining the scheme will receive Federal Board of Revenue plaques carrying unique QR codes, which will be displayed outside their shops.

A point-of-sale system will also be installed inside participating businesses.

Tax inspectors will be able to scan the QR codes to access the tax details of registered shops during market visits.

Any irregularities identified under the system will be subject to audit in consultation with the relevant local traders’ association.

Muhammad Aurangzeb described the scheme as an important step towards developing a more equitable, balanced and sustainable tax system.