ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb has announced a “fixed tax system” for small shopkeepers under the Income Tax Ordinance, aimed at simplifying taxation and reducing harassment of the business community.
Under the scheme, shopkeepers with annual sales of up to Rs20 million will pay a fixed tax of 1 percent on their total turnover.
The finance minister said that traders opting for the scheme will not be subject to routine audits, marking a major relief for small businesses.
He added that participants in the fixed tax system will also be exempted from the requirement of installing point-of-sale (POS) machines at their shops.
As part of the initiative, registered taxpayers will be issued a green QR-coded plaque, which will be displayed at their shops. Authorities said that where the green plaque is displayed, FBR officials will not be allowed to enter the premises for routine questioning.
The government will also introduce a simplified one-page tax return form, available in Urdu and other local languages, to make compliance easier for small traders.
The finance minister further stated that while previously only companies were required to deduct withholding tax on purchases from unregistered suppliers, the same responsibility will now extend to individual businesses and associations of persons as well.
