Islamabad, August 2025 – The Federal Board of Revenue (FBR) has officially identified Tier-1 retailers for the tax year 2026 (covering July 2025 to June 2026), in line with updated sales tax regulations.
This move aims to enhance compliance, broaden the tax base, and streamline the monitoring of high-volume retail businesses across Pakistan.
According to the FBR, a Tier-1 retailer is any retailer who falls into one or more of the following categories:
• A retailer operating as part of a national or international chain of stores.
• A retailer operating in an air-conditioned shopping mall, plaza, or center, excluding kiosks.
• A retailer whose annual electricity bill for the preceding twelve consecutive months exceeds Rs. 1.2 million.
• A wholesaler-cum-retailer engaged in bulk import and wholesale supply of consumer goods to other retailers, while also selling directly to consumers.
• A retailer equipped with a Point of Sale (POS) system to accept debit or credit card payments through banking companies or any State Bank–authorized digital payment service provider.
• A retailer whose withholding tax deductions under Sections 236G or 236H of the Income Tax Ordinance, 2001, in the past twelve months exceed the threshold notified by the FBR.
• Any other person or class of persons as prescribed by the FBR in the official Gazette.
The classification of Tier-1 retailers ensures better tax enforcement and helps the FBR track sales, revenue, and tax compliance more effectively. Retailers meeting these criteria are expected to maintain proper invoicing, integrate their POS systems with the FBR, and follow all mandated reporting requirements for the tax year 2026.