Pakistan introduces fixed tax system for small shopkeepers

Federal Finance Minister Muhammad Aurangzeb has announced a new “fixed tax system” for small shopkeepers to simplify taxes and reduce pressure on the business community.

Under the new scheme, shopkeepers with annual sales of up to Rs20 million will pay a fixed 1 percent tax on their total turnover. Officials say this will make tax payments easier and more predictable.

The government has also said that shopkeepers who join the scheme will not face routine tax audits, which is expected to reduce harassment and save time for small businesses.

Another relief under the plan is that participants will not be required to install point-of-sale (POS) machines in their shops.

As part of the system, registered traders will receive a green QR-coded plaque to display at their shops. Authorities said that shops with this plaque will not be subject to routine visits from tax officials.

The government also plans to introduce a simple one-page tax return form in Urdu and other local languages to make the process easier for small traders.

In addition, the finance minister said that withholding tax rules will be expanded. Now, not only companies but also individual businesses and associations will be responsible for deducting tax on purchases from unregistered suppliers.

Officials say these steps aim to make the tax system simpler, more transparent, and easier for small businesses to follow.