Section 191B of the Income Tax Ordinance, 2001 provides for imprisonment, a fine or both for small traders and shopkeepers who fail to register as required under the law.

The Federal Board of Revenue (FBR) has prescribed penalties, including imprisonment of up to six months, for small traders and shopkeepers who fail to complete mandatory tax registration for Tax Year 2027.

According to Section 191B of the Income Tax Ordinance, 2001, updated up to June 30, 2026, any person covered by Section 99B who is required to apply for registration but fails to do so commits an offence.

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Upon conviction, the person may face imprisonment for a term not exceeding six months, a fine, or both.

Tax Year 2027 runs from July 1, 2026, to June 30, 2027.

Section 191B establishes the prosecution mechanism for non-registration, while Section 99B provides the legal framework for a special tax procedure covering small traders and shopkeepers.

Under Section 99B, the FBR, with the approval of the minister in charge, may prescribe a special procedure through a notification published in the official Gazette. The procedure may cover the scope and rate of tax, payment arrangements, fixed tax, return filing, audit and assessment.

The special procedure applies to traders and shopkeepers operating in the cities or territories specified in the relevant notification.

The provisions establish potential criminal consequences for eligible traders and shopkeepers who fail to meet applicable registration requirements. Those affected should check the relevant FBR notifications to determine whether the special procedure applies to their businesses and what registration obligations they must fulfil.

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