Simplified “Asaan” tax regime aims to expand formal retail sector
ISLAMABAD, June 12, 2026 — Pakistan launches fixed tax scheme for retailers under Rs200 million annual turnover as part of Budget 2026–27, introducing a simplified taxation structure aimed at improving compliance and widening the tax net.
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The federal government has unveiled a new fixed tax scheme for small traders and retailers as part of its broader strategy to expand the tax net and increase revenue collection. Finance Minister Muhammad Aurangzeb announced the initiative during a joint press conference with Minister of State for Finance Bilal Azhar Kayani in Islamabad.
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ISLAMABAD: Asim Ahmad, Chairman, Federal Board of Revenue (FBR) on Monday said there is no audit of the IT sector due to fixed tax regime.
There is no audit of IT sector export-oriented companies through budgetary measures in the current financial year for ensuring ease of doing business and reducing the cost of tax compliance.
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“As fixed and final tax regime has been introduced in this fiscal year therefore, no tax or audit notices will be sent to the IT sector professionals and easier documentation will be the priority,” FBR chairman said.
Special Assistant to the Prime Minister on youth affairs Miss Shaza Fatima and the Prime Minister’s task force on Information technology and Telecom sector, convened a meeting in the Prime Minister’s office to discuss IT sector exports taxation issues and the impact thereof particularly of small and medium IT companies and software houses, with Chairman FBR Asim Ahmad, officials of the Ministry of IT and representatives of PASHA.
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The Prime Minister Mian Shehbaz Shareef constituted a task force to devise ways to increase the Information Technology exports by $3 billion till 2023.
On the note of exemption from the proposed 0.25 per cent tax, this will remain and it is a quarter of what the other exporters pay.
In the Final Tax Regime, the Federal Board of Revenue has agreed in principle to resolve sales tax registration and return filing issues.
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The definitions of IT in the June 2022 Finance Act were deliberated upon, and found to be all inclusive. The Federal Board of Revenue has also agreed in principle to propose necessary changes in law for all IT exports to attain the benefit of final tax regime.
In principle the FBR agreed upon the proposal that if the Provincial consensus is reached, Federal Excise Duty (FED) can be reduced from 19.5 per cent to 17 per cent for Telecom sector.
The funds received by the IT sector through applications like Payoneer etc. will be given the benefit of final tax regime through necessary changes in the law, if required.
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ISLAMABAD: Small retailers or a shopkeepers have to pay double the amount of fixed tax in case of not appearing on the Active Taxpayers List (ATL).
The federal government through the Finance Bill, 2022 introduced a scheme of fixed tax for small retailers.
However, the National Assembly approved the bill with certain changes in the fixed tax regime. The Finance Act, 2022 now has binding on the small retailer to register themselves with the tax department and appear on the Active Taxpayers list (ATL) in order to avail the fixed tax facility.
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Otherwise, in case of not appearing on the ATL, the small retailer is required to pay one hundred per cent more on the amount of fixed tax.
In order to collect the tax under this regime, the government decided to recover the amount through electricity bill.
In this regard certain amendments have been made to Sales Tax Act, 1990 and Income Tax Ordinance, 2001.
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In sub section 9, Section 3 of Sales Tax Act, 1990, a new proviso has been inserted through the Finance Act, 2022, which stated:
“Provided that the above rates of tax shall be increased by one hundred percent if the name of the person is not appearing in the Active Taxpayers List issued by the Board under section 181A of the Income Tax Ordinance, 2001 on the date of issuance of monthly electricity bill.”
Similarly, a new Section 99A has been inserted to the Income Tax Ordinance, 2001 and approved through the Finance Act, 2022, which is as follow:
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“99A. Special provisions relating to payment of tax through electricity connections.
(1) Notwithstanding anything contained in the Ordinance, a tax shall be charged and collected from retailers other than Tier-I retailers as defined in Sales Tax Act, 1990 (VII of 1990) and specified service providers on commercial electricity connections at the rates provided in clause (2A) of Division IV, Part IV of the First Schedule.
(2) A retailer who has paid sales tax under sub-section (9) of section 3 of Sales Tax Act, 1990 (VII of 1990), shall not be required to pay tax under this section and the sales tax so paid shall constitute discharge of tax liability under this section.
(3) The tax collected or paid under this section shall be final tax on the income of persons covered under this section in respect of business being carried out from the premises where the electricity connection is installed.
(4) For the purposes of this section, Board with the approval of the Minister in-charge may issue an income tax general order to-
(a) provide the scope, time, payment, recovery, penalty, default surcharge, adjustment or refund of tax payable under this section in such manner and with such conditions as may be specified.
(b) provide record keeping, filing of return, statement and assessment in such manner and with such conditions as may be specified;
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(c) provide mechanism of collection, deduction and payment of tax in respect of any person; or
(d) include or exempt any person or classes of persons, any income or classes of income from the application of this section, in such manner and with such conditions as may be specified.”
The rate of tax leviable under section (99A), and collectable under sub section (1A) of Section 235 shall be as under:-
| Gross amount of monthly bill | Tax |
| Where the amount does not exceed Rs. 30,000 | Rs. 3000 |
| Where the amount exceeds Rs. 30,000 but does not exceed Rs. 50,000 | Rs. 5000 |
| Where the amount exceeds Rs. 50,000 but doesnot exceed Rs. 100,000 | Rs. 10,000 |
| Specified retailers and service providers through Income Tax General Order | Rs.50,000 |
ISLAMABAD: Federal Board of Revenue (FBR) likely to fix an amount of Rs20,000 per year as income tax for shopkeepers operating business in a covered area up to 150 square feet.
This fixed rate shall be for shopkeepers not in categorized areas.
Sources in FBR said that the fixed tax rates likely to be for area up t 150 square feet and for area above 150 square feet and less than 300 square feet. The rate of tax will be different for category A shopkeepers and other than this category shopkeepers.
A person having shop with area of up to 150 square feet in category A area than the tax rate shall be Rs35,000.
A person having shop with covered area above 150 square feet and not exceeding 300 square feet and located in other than category A the fixed tax likely be Rs25,000.
Meanwhile, a person having shop with covered area above 150 square feet and not exceeding 300 square feet and located in a category area A the fixed tax shall be Rs40,000 per year.
The sources said that there shall be an option to small shopkeepers to pay two percent as income tax of the turnover.
The sources said that the FBR has finalized income tax return form tax year 2019 for small shopkeepers. This form shall be simple and one-page as committed by the FBR.
Following is the draft income tax return form for retailers. The draft from has not been issued officially. The sources said that there may be changes in the final format to be issued by the FBR.
ISLAMABAD: The chairman of Federal Board of Revenue (FBR) on Friday constituted a committee to finalize fixed tax scheme and simplified tax procedure for traders.
The committee has been constituted comprising following members:
01. Ms. Nausheen Amjad, Member (TPA) – Convener
02. Faheem ul Haq, Member, Accounting
03. Ms. Seema Shakeel, Member (IR-Operations)
04. Dr. Hamid Ateeq Sarwar, Member (IR-Policy)
05. Ashfaque Tola, Chartered Accountant
06. Abid Shaban, Advocate
07. Naeem Mir, All Pakistan Anjuman-e-Tajiran
08. Khawaja Sulaiman Siddique, Tanzeem-e-Tajran Pakistan
09. Malik Khalid, Qaumi Tajir Ittehad, Pakistan
10. Mohammad Ali Mian, Pakistan Traders Alliance
11. Ashraf Bhatti, Anjuman-e-Tajran (Bhatti Group)
12. Kashif Chaudhry, Tanzeem-e-Tajran Pakistan.
The FBR said that the committee would discuss the various aspects of the draft of fixed tax scheme for small traders / shopkeepers and simplified tax procedure for traders and shall come up with finalization of the same in the present or amended form after through discussion and consultation.
Member (IR-Policy), FBR shall act as secretary to the committee.
The committee shall submit its recommendations not later than August 25, 2019 to the office of the chairman FBR.
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