ISLAMABAD: In a major pre-budget move aimed at broadening Pakistan’s narrow tax base, the government on Friday announced a simplified voluntary fixed tax scheme (Fixed Tax Asaan Scheme) for small traders, offering exemption from routine audits and Point-of-Sale (POS) requirements in return for the payment of a fixed tax of one percent on their declared annual sales.
Kiani, who led the government team in detailed negotiations with the trader community, said the new fixed tax scheme would apply to businesses with an annual turnover (total sales) of up to Rs200 million.
Under the scheme, a tax of one per cent would be payable through a simple form that would be made available in all local languages.
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The announcement was made through a recorded message by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiani, and Member, Federal Board of Revenue (FBR), Hamid Attique Sarwar. They said the fixed tax regime had been finalised in consultation with trader bodies and representatives in response to their demand for a simplified tax compliance mechanism.
The scheme is expected to bring between 3.5 million and 4 million small traders into the tax net and is being described by the government as a significant step towards documenting the economy without increasing tax rates.
Under the scheme, traders with an annual turnover of up to Rs200 million will be eligible to opt into the new regime by paying a fixed tax equivalent to one percent of their declared sales. The ministers said the scheme is entirely voluntary and traders may choose to remain under the existing normal tax regime if they prefer. Under the scheme, a tax of one per cent would be payable through a simple form that would be made available in all local languages.
Aurangzeb said the government’s priority was to expand the tax base rather than impose additional burdens on existing taxpayers.
“We need to broaden the tax system. Instead of increasing tax rates, we want to gradually reduce the burden on existing taxpayers by bringing more people into the tax net,” he said. The new framework has been developed after extensive consultations with traders’ associations and incorporates lessons learned from previous trader tax schemes.
Copyright Business Recorder, 2026
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