On 9 September 2026, Chief Commissioner Inland Revenue Fiza Batool addressed the Lahore Chamber of Commerce and Industry to promote the fixed tax scheme, introduced through SRO 1166(I)/2026, which aims to bring more small businesses into the documented economy by making taxation easier, transparent and less burdensome.
This marks a critical juncture for practising accountants and firm advisers. The scheme represents a formal policy shift toward simplification and voluntary compliance—and it directly reshapes how many of your small trader and retail clients should structure their tax obligations.
Core Features for Practitioner Guidance
The scheme follows the principle of "One Page, One Return, One Percent", requiring minimal information from eligible traders, with tax calculated at 1% of turnover subject to a minimum liability of Rs 25,000. This is a significant departure from standard income tax return complexity, and your clients operating small retail businesses may be eligible.
Eligible businesses with annual turnover up to Rs 200 million will pay tax at 1% of turnover, subject to a minimum tax liability of Rs 25,000, while enjoying relief from Point of Sale (POS) integration, digital invoicing and routine audit requirements.
Exemptions and Protections You Should Advise
Under the scheme, eligible businesses would be facilitated through exemptions from routine audit, Point of Sale (POS) integration and digital invoicing requirements, while a green plate would be provided to registered shopkeepers to facilitate inspection.
This exemption from audit and POS/digital invoicing requirements represents material relief from compliance burden—but is conditional.
The scheme will not apply to individuals whose turnover exceeded Rs 200 million in any one of the preceding three years; those owning more than one shop; Tier-I retailers; sellers of jewellery; and providers of professional services, such as doctors, engineers and lawyers.
Critical Point: The Scheme Is Voluntary
The scheme is voluntary and traders have the option to either continue filing returns under the normal tax regime or go for the new, simplified one. This is essential for your advice. A retail client does not automatically fall into the scheme; election is required. You should assess each small retail client against eligibility criteria and file rate comparisons to advise whether the 1% fixed regime or standard returns offer better value.
Registration Pathway and Support
Traders would be able to register through the IRIS portal, the FBR mobile application, or their nearest tax office.
The FBR had established a helpline and WhatsApp facility for complaints and would also initiate an open-court mechanism to provide another platform for taxpayers to raise their issues.
Strategic Implications for Practitioners
The scheme signals FBR's intent to broaden the tax base through facilitation rather than enforcement. For your practice, this creates several advisory opportunities:
- Client screening: Audit your small retail book to identify clients eligible for the scheme.
- Return strategy: Model tax liability under both regimes (standard return vs. 1% fixed) to advise the optimal election.
- Compliance simplification: Clients in the scheme no longer require full books of accounts or audit—administrative cost savings can be passed to clients or retained as margin.
- Documentation: Ensure clients opting for the scheme are clearly aware of the turnover ceiling and exclusions, and that the green plate protection and exemptions are properly understood.
The scheme was aimed at bringing more small businesses into the documented economy by making taxation easier, transparent and less burdensome. For accountants, it offers a pathway to expand client relationships among the informal retail sector with straightforward compliance models.
Note: This is an AI-assisted summary based on FBR announcements and Pakistani business press reporting as of 9 September 2026. Practitioners should verify all figures and eligibility criteria against the official SRO 1166(I)/2026 text and current FBR guidance on IRIS before advising clients.