The Federal Board of Revenue (FBR) has proposed a new tax scheme for small retailers that would prevent tax officials from entering registered shops displaying an official FBR Green Plate. The proposal has been issued through S.R.O. 1109(I)/2026 as part of efforts to simplify tax compliance and encourage retailers to join the tax net.
Under the proposed procedure, individual shopkeepers with an annual turnover of up to Rs. 200 million for tax year 2026 will be eligible to register under the scheme. Participants will submit a simplified income tax return through the IRIS web portal or a dedicated mobile application, declaring their sales, purchases, expenses, net profit, and legitimate assets. The return forms will also be available in Urdu and regional languages to improve accessibility.
Retailers opting for the scheme will pay 1 percent of their gross annual turnover as income tax and will be allowed to adjust withholding taxes against their overall tax liability. However, they will be required to pay a minimum annual tax of Rs. 25,000, or the amount due after adjustments, whichever is higher.
Green Plate to Protect Registered Shops
A key feature of the proposal is the introduction of the FBR Green Plate, which will be issued to registered retailers. The plate will display the owner’s name, National Tax Number (NTN), shop address, and a QR code for verification.
According to the FBR, tax officers and Inland Revenue officials will not be allowed to enter shops displaying the Green Plate for tax-related inspections or inquiries.
Eligibility Criteria
The scheme will not be available to:
- Retailers with annual turnover exceeding Rs. 200 million in any of the previous three years.
- Owners operating multiple shops.
- Tier-1 retailers.
- Jewellery businesses.
- Professionals such as doctors, engineers, and lawyers.
Existing retailers who filed tax returns for Tax Year 2025 may also join the scheme, provided they do not reduce their tax liability or restructure their businesses solely to become eligible.
FBR Targets Three Million Retailers
The FBR aims to bring more than three million retailers into the simplified fixed tax regime. Retailers participating in the scheme will generally be exempt from routine tax audits, providing greater certainty and ease of doing business.
The tax authority has invited public comments, objections, and suggestions on the draft proposal within seven days of its publication in the official Gazette before the procedure is finalized.
