FBR Tax Scheme Small Retailers to Pay 1% Tax Under New Procedure

The Federal Board of Revenue (FBR) has introduced a special tax procedure for small retailers, aiming to simplify tax compliance during Tax Year 2026.

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Under the new notification, individual retailers with an annual turnover of up to Rs200 million can join the scheme. Eligible retailers will pay a 1% tax on their gross annual turnover.

The FBR said retailers must submit a minimum cash tax payment of Rs25,000 along with their annual tax return. Additionally, retailers can adjust any withholding tax already paid against their total tax liability. However, the FBR will not refund any excess amount.

Registration and exemptions

Eligible retailers can register through the IRIS portal, the FBR mobile application or their local tax office.

The tax authority said retailers who join the scheme will generally remain exempt from routine tax audits. Moreover, they will not need to install Point of Sale (POS) systems or implement digital invoicing requirements.

Penalties for non-compliance

The FBR warned that it will take departmental action if it detects unusual transactions or misuse of the scheme.

Retailers who fail to file their tax returns or do not opt into the scheme before the prescribed deadline will face penalties ranging from Rs10,000 to Rs50,000.

The FBR also announced that registered retailers under the scheme will receive a “Green Plate” displaying an official FBR-issued QR code.