A grocery shop owner in Karachi recently heard that filing income tax returns may no longer be necessary for him. Instead, he could pay one percent of his turnover and be done with it. It sounded almost too easy. But is it actually cheaper? And who does it really benefit? The scheme in question is the Federal Board of Revenue's new fixed-tax option for small retailers, first announced as part of the 2026–27 budget. The draft rules were subsequently issued through SRO 1109(I)/2026.

Under the draft, retailers with an annual turnover of up to Rs200 million can choose to pay a flat one percent tax on their total sales, with a minimum annual payment of Rs25,000, instead of filing detailed returns and being subject to routine tax audits. Participants file a simplified one-page tax return instead of the regular filing process. Those who file under the scheme receive a QR-coded Green Plate for display at their premises, tax officers are barred from entering the premises for tax-related matters, and they are exempt from installing mandatory point-of-sale systems and adopting digital invoicing. The scheme is optional. Nobody is forced into it, and a retailer can still choose to file under the regular system if that works out better for them.

It is also not available to everyone: retailers whose turnover exceeded Rs200 million in any of the past three years, owners of more than one shop, Tier-1 retailers, jewellers, and professionals such as doctors, engineers and lawyers are all excluded. On paper, the government's logic is straightforward. Make compliance simpler and encourage voluntary registration — and in........

© The Friday Times