Traders offered 1% tax scheme

The Federal Board of Revenue (FBR) has launched a simplified tax return filing facility for small traders, offering a 1% tax rate on turnover with a minimum liability of Rs25,000, officials said on Tuesday.

Speaking at an awareness session at the Karachi Chamber of Commerce and Industry (KCCI), Member Inland Revenue Zubair Bilal described the initiative as one of the most liberal and trader-friendly tax measures introduced in decades. He urged small traders and shopkeepers to voluntarily enter the formal tax system.

During his 31 years of service, Bilal said, he had witnessed various schemes aimed at bringing traders into the tax system, but the present initiative was exceptionally liberal and offered a valuable opportunity to regularise tax affairs through a much simpler mechanism.

Bilal assured traders that they should not view the initiative with fear or suspicion but rather as an opportunity to become part of the documented economy through an easier system backed by a grievance-redressal mechanism.

"Just as a child cannot be encouraged to study by constantly standing over him with a stick, traders cannot be sustainably brought into the tax system merely through coercion," he said. Once traders understand the system and have confidence in it, they will voluntarily become part of it, he added.

Bilal highlighted Karachi's extraordinary contribution to the national exchequer, noting that even a single Large Taxpayers Office accounts for roughly one-third of the country's tax collection.

Separately, Chief Commissioner Inland Revenue Fiza Batool visited the Lahore Chamber of Commerce and Industry (LCCI) to brief the business community about the special procedure for small shopkeepers introduced through SRO 1166(I)/2026.Under the scheme, eligible businesses with annual turnover up to Rs200 million will pay tax at 1% of turnover, subject to a minimum tax liability of Rs25,000, while enjoying relief from Point of Sale (POS) integration, digital invoicing and routine audit requirements. A green plate will be provided to registered shopkeepers to facilitate inspection.

LCCI President Faheemur Rehman Saigol welcomed the initiative, saying it was a longstanding demand of the chamber. He said the one-page return would save time, reduce compliance costs and make tax filing considerably easier for small businesses.

Saigol said the scheme was voluntary, allowing businesses to remain under the normal tax regime if they desired. He stressed that the objective should be to make taxation easier so that businesses voluntarily enter the tax net.