FBR receives only 130 returns under small traders' tax scheme
The Federal Board of Revenue has received only 130 income tax returns under its special tax scheme for small traders and shopkeepers, far below the 500,000 to 600,000 filings it had anticipated, according to Sayyeda Maimuna, Second Secretary at the FBR headquarters' Transformation Delivery Unit.
Speaking on The Express Tribune podcast, Maimuna said the scheme was introduced in consultation with traders to simplify compliance, expand the tax base and reduce the burden of complicated filing procedures. Eligible traders can pay a minimum annual tax of Rs25,000 or 1% of annual turnover, depending on the applicable calculation, and file a simplified one-page return through the Tax Asaan app or the FBR's online system. Small shopkeepers without digital access can seek help at Regional Tax Offices' taxpayer facilitation centres.
"We have brought this scheme to fill the gap. We want our tax base to expand," Maimuna said, expressing disappointment at the low uptake despite consultations with trade bodies. She noted that traders may either opt for the special scheme or file regular income tax returns, with those choosing the normal route remaining subject to applicable tax laws. Individuals earning below the annual taxable income threshold of Rs600,000 are not required to pay income tax, though they may still have return-filing obligations.
Maimuna said the scheme offers participating traders protection from routine FBR inspections, raids and shop sealing, with a green identification display outside their premises. However, she cautioned that the simplified system does not mean the FBR will ignore significant discrepancies between declared earnings and third-party information, and such cases could be referred to relevant trade associations. She also said small traders have been exempted from certain point-of-sale and digital invoicing requirements, and the scheme provides relief from withholding tax under Section 153, subject to conditions.
On data protection, Maimuna said the law requires the FBR to safeguard taxpayers' information, and the board is investing in digital systems to better identify economic activity and promote a cashless, paperless economy. She outlined penalties for non-compliance, including fines for failing to file returns or wealth statements, and measures such as blocking SIM cards, disconnecting electricity or sealing business premises where legally authorised. She advised taxpayers to consult the FBR's official website for authentic notifications and warned against fake announcements online. Traders who believe their rights under the scheme have been violated can approach their Regional Tax Office, complain to the Federal Tax Ombudsman or contact the FBR through its helpline and official email channels. Maimuna said broadening the tax base would distribute the burden more fairly across traders, professionals, property owners and salaried individuals, though benefits would emerge gradually.
