Government Nears Deal on Retailers’ Fixed Tax Scheme

The federal government and representatives of the trader community are reportedly nearing consensus on a proposed simplified fixed tax regime for retailers, which is expected to form part of the Finance Bill 2026-27 for businesses having annual turnover up to ₨200 million, according to a report published by The News International citing official sources.

The proposed taxation framework has been discussed with small traders and various representative trade bodies ahead of the upcoming federal budget, which is currently expected to be presented before Parliament by June 5, 2026.

Under the proposed structure, retailers with annual turnover not exceeding ₨200 million would be required to pay a fixed tax equivalent to 1% of turnover, subject to a minimum tax liability of ₨25,000.

Officials stated that taxpayers opting into the proposed regime would generally remain outside the scope of routine audit proceedings unless the Federal Board of Revenue identifies material discrepancies relating to declared income, turnover, or asset disclosures.

The FBR is also expected to issue QR code-based registration certificates to retailers participating in the simplified tax scheme.

Sources further indicated that retailers choosing to remain outside both the normal taxation regime and the proposed fixed tax framework may become subject to penalties through amendments proposed in the Finance Bill 2026-27.

According to officials, the government is expected to formally announce the proposed scheme following the Eid al-Adha holidays.