ISLAMABAD: Following the apparent failure of the Tajir Dost Scheme announced a year ago to expand the tax net, the government on Friday unveiled another scheme, dubbed the ‘Fixed Tax Asaan Scheme’, for small traders and shopkeepers with an annual turnover of up to Rs200 million.

The announcement was made by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiani and Member Federal Board of Revenue (FBR) Hamid Attique Sarwar through a recorded message, saying the fixed tax regime was finalised on the demand and in consultation with trader bodies and representatives for tax compliance.

Kiani, who led a government team in detailed negotiations with the trader community, said the new fixed and easy scheme would apply to those with annual turnover (total sales) of Rs200m at the rate of 1 per cent tax and would be payable through a simple form to be available in all local languages.

He said the payable tax would be adjustable against withholding tax already paid with the condition that a minimum Rs25,000 would be paid with the submission of the tax form; otherwise, the normal tax rate of 1pc would apply.

He said the scheme would be optional for traders who may want to join, otherwise, they could continue with the normal tax regime. Those opting for the new fixed scheme would be issued a special plaque for display at their business premises containing personal details such as name, registration, national tax number and so on, along with a QR Code. A tax inspector would scan the QR code on the special plaque and, if found genuine, would not be allowed to enter the premises for tax purposes.

Kiani said those opting for the new scheme would be exempt from the Point-of-Sale (POS) requirement as well as from audit. In exceptional cases, if any tax dispute arise would be processed in consultation with the traders association concerned.

The non-filers and existing filers would also be able to join the scheme provided their annual turnover did not exceed Rs200m in any of the last three years, and the minimum tax amount is higher than last year.

He said the third category of traders who stay away from both fixed and normal tax regime would be subject to a Rs10,000 per month fine for the first month, increasing to Rs25,000 per month the following month and then Rs51,000 per month for the third month.

He further stated the new fixed tax scheme had been designed based on lessons learned from all past failed schemes and “would be successful this time”.

He said kiosks and push cart-based small traders were exempt from even the new fixed tax scheme.

While Sarwar said there were around 4.4m traders and the new scheme would cover about 3.5m. He said the larger traders described in the Tier-1 and mostly in the branded category would not be allowed to opt for the new scheme. The number of such tier-1 brands covered was around 50,000-100,000.

Sarwar confirmed that most of those falling in the new schemes were paying no to negligible tax and even their small contributions would make a big difference instead of burdening the compliant taxpayers. He stressed that the scheme should not be described as an amnesty scheme.

Officials said the scheme would cover those who have operated a business for at least three years, maintain a shop or business premises, and belong to professions other than specialised services. Small taxpayers who were already filing tax returns before 2025 could also become part of this simplified scheme if they meet the required conditions.

The traders would be able to register through the FBR website, mobile apps or tax practitioners and would be required to maintain simple and organised records of sales, expenses, purchases, and business transactions for easier compliance.

Advantages like Active Taxpayer List (ATL) status, lower withholding taxes, and improved financial credibility would become available to those opting for the scheme.

The development comes ahead of the presentation of the federal budget for the next fiscal year (FY2026-27). Scheduled for June 10, the budget is expected to be formulated under the tight oversight of the International Monetary Fund (IMF).