Govt targets two million retailers under new tax scheme to raise Rs50 billion

The government plans to register around two million retailers under a proposed tax scheme expected to generate an additional Rs50 billion in revenue, the National Assembly Standing Committee on Finance was informed on Wednesday.

Minister of State for Finance Bilal Azhar Kayani briefed the committee on the structure and expected results of the scheme, which is aimed at bringing undocumented retailers into the tax system.

The meeting was chaired by Naveed Qamar and reviewed the proposed registration, taxation and enforcement mechanisms.

Kayani said more than 3.5 million retailers remained outside the tax net, based on the number of commercial electricity connections, while only 660,792 shopkeepers were currently registered.

He said the retail sector offered considerable scope for the Federal Board of Revenue to widen the tax base.

According to the state minister, bringing 30% of currently unregistered retailers into the scheme could add more than one million taxpayers.

The proposed framework would allow shopkeepers to declare their income and tax liability directly through their returns. Small traders would be exempt from point-of-sale systems and digital invoicing requirements.

The government has also proposed penalties for non-payment of fixed tax. A defaulting retailer could face a fine of Rs10,000 in the first month, Rs25,000 in the second month and Rs50,000 in the third month.

Businesses that continue to default could be closed, Kayani told the committee.

The government is also developing a Faceless Assessment and Audit System to reduce direct interaction between taxpayers and tax officials.

The system is intended to limit discretionary powers and reduce opportunities for collusion between officials and taxpayers.

Separately, the Senate Standing Committee on Finance, chaired by Saleem Mandviwala, concluded its review of the Finance Bill 2026-27 and the Annual Budget Statement.

The committee examined proposals covering taxation, customs administration, digitisation of tax systems, industrial competitiveness, exports, investment, tariff reforms and revenue generation.