https://arab.news/vaduj
- One percent tax will be imposed on annual retail sales of $719,000 or less, says minister
- Says shopkeepers who avail scheme will be able to adjust their withholding tax payments
ISLAMABAD: Pakistan’s government will impose a 1 percent fixed tax on the annual retail sales of Rs200 million [$719,000] or less of shopkeepers across the country, State Minister for Finance Bilal Azhar Kiani said on Friday, saying the move intends to bring an estimated 3-4 million shopkeepers under the tax net.
The announcement came days before Pakistan presents its annual federal budget 2026-27 on June 10. Trade unions such as the Pakistan Business Forum (PBF) have called on Pakistan to impose a fixed tax on shopkeepers to bring them under the tax net.
Pakistan has introduced reforms in recent years, backed by the International Monetary Fund, to increase its tax base and improve its tax-to-GDP ratio. At around 10 percent, Pakistan’s tax-to-GDP ratio remains among the lowest in the world.
Speaking to reporters at a news conference with Finance Minister Muhammad Aurngazeb by his side, Kiani said the fixed tax scheme was announced after a consultative process, adding that the decision was taken at the demands of Pakistan’s trade unions.
“First of all, the application of this easy scheme will be on those shopkeepers whose annual turnover or sales are less than Rs 200 million or less than that,” Kiani said.
He said shopkeepers will have to sign up for the scheme by sharing the details of their earnings and revenue in a form available in several local languages.
“On one page, they will state their earnings and whatever earnings they state, a fixed tax of 1 percent will be imposed on it,” Kiani said.
The minister clarified that shopkeepers who avail the scheme will be able to adjust their withholding tax payments.
However, they will have to abide by the condition that at least Rs25,000 [$90] will be deposited in cash when filing the tax returns.
Kiani said shopkeepers who opt for the scheme will receive plaques from the Federal Board of Revenue (FBR) that would display a unique QR code. These plaques will be placed outside shops and a point of sale system inside them.
He said both filers and non-filers can avail the fixed tax scheme.
The minister warned that any shopkeeper who does not file his returns under the normal tax regime or this scheme will be fined Rs10,000 [$35.95] the first month, Rs25,000 [$89.99] the second and Rs50,000 [$179.75] the third month.
The announcement comes as Pakistan aims to increase its revenue by expanding its tax base, as it grapples with an economic crisis under a $7 billion IMF loan program.
