ISLAMABAD: After the apparent failure of the Tajir Dost scheme announced last year to expand the tax net, the government on Friday unveiled another tax amnesty initiative, titled 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 Kayani and Federal Board of Revenue (FBR) member Hamid Attique Sarwar. In a recorded message, they said the fixed tax regime had been finalised on the demand of, and in consultation with, trader bodies and representatives to encourage tax compliance.
Mr Aurangzeb said an artificial intelligence-led system would be announced before parliament next week.
He said the key objective of the ongoing tax reforms, being carried out under the direct supervision of the prime minister, was to expand the tax net, reduce the disproportionate burden on the documented sector and salaried class and move towards a balanced, fair and sustainable tax system.
He said it was important for the country, as it moved from economic stability towards economic progress, to increase national income to a level that could support self-reliance.
The finance minister said the fiscal buffers created through economic stability had helped meet additional fiscal pressures arising last year from flood devastation and the recent increase in the import bill.
He said the new fixed tax scheme, finalised in close coordination with the trader community, would cover three to four million small traders and shopkeepers who were ready to contribute to national resources but wanted facilitation. “This is an important milestone in expanding the tax net,” he said.
Minister of State Bilal Kayani, who led government negotiations with trader representatives, said the new fixed and easy scheme would apply to businesses with an annual turnover of up to Rs200m at a tax rate of 1 per cent.
He said the tax would be payable through a simple form to be made available in Urdu, Pashto, Sindhi, Balochi and other languages.
He said the payable tax would be adjustable against withholding tax already paid, with the condition that a minimum of Rs25,000 would be paid with the submission of the tax form. Otherwise, the normal tax rate of 1pc would apply.
Mr Kayani said the scheme would be optional for traders, who could either join it or continue under the normal tax regime.
Those opting for the new scheme would be issued a special plate for display at their business premises, containing details such as name, registration, national tax number and a QR code.
He said a tax inspector would scan the QR code and special plate and, if found genuine, would not be allowed to enter the premises for tax purposes.
Mr Kayani said traders opting for the new scheme would be exempt from point-of-sale requirements as well as audit. In exceptional cases, any tax dispute would be processed in consultation with the relevant traders’ association.
He said non-filers and existing filers would also be able to join the scheme, provided their annual turnover had not exceeded Rs200m in any of the last three years and the minimum tax amount was higher than last year’s payment.
He said traders who stayed outside both the fixed and normal tax regimes would face a fine of Rs10,000 for the first month, rising to Rs25,000 in the second month and Rs51,000 in the third month.
Mr Kayani said the new fixed tax scheme had been designed on the basis of lessons learned from past failed schemes and “would be successful this time”.
He said kiosk and pushcart-based small traders would remain exempt from the new fixed tax scheme.
FBR member Hamid Attique Sarwar said there were around 4.4m traders in the country and the new scheme would cover about 3.5m of them.
He said larger traders falling in Tier-1, mostly branded outlets, would not be allowed to opt for the new scheme. The number of such Tier-1 businesses ranged between 50,000 and 100,000.
Mr Sarwar confirmed that most traders falling under the new scheme were currently paying little to no tax, and even small contributions from them would make a significant difference instead of further burdening compliant taxpayers.
He insisted that the scheme should not be described as an amnesty.
Officials said the scheme would cover those who had operated a business for at least three years, maintained a shop or business premises and belonged to professions other than specialised services.
Small taxpayers who were already filing tax returns before 2025 could also become part of the simplified scheme if they met the required conditions.
Traders would be able to register through the FBR website, mobile apps or tax practitioners. They would be required to maintain simple and organised records of sales, expenses, purchases and business transactions for easier compliance.
Those opting for the scheme would get benefits such as Active Taxpayer List status, lower withholding taxes and improved financial credibility.
Published in Dawn, June 6th, 2026