KARACHI: Pakistan’s government proposed new tax measures Friday aimed at small retailers, digital earners and importers as part of the federal budget for the 2026-27 fiscal year, a push to widen the tax base and curb misuse of exemptions.
The centerpiece of the plan is a Fixed Tax “Asaan Scheme” for retailers with annual sales up to 200 million rupees (about $720,000).
Eligible retailers would pay either a minimum annual tax of 25,000 rupees ($90) or 1% of sales, whichever is higher. The scheme is optional and designed to bring small traders into the formal tax net without mandatory audits.
“We need to reduce the tax rate,” Finance Minister Muhammad Aurangzeb told lawmakers, acknowledging that the documented corporate sector and salaried workers face a “disproportionate tax burden.”
Aurangzeb said the measure targets roughly 3 million to 4 million small shopkeepers, calling it “an important milestone in terms of expanding our tax net.”
Under the scheme, withholding tax already deducted would be adjusted, but retailers would pay at least 25,000 rupees at the time of filing. In return, participants would be exempt from the Federal Board of Revenue’s point-of-sale requirements and from audits.
Retailers who fail to register under either the fixed scheme or the normal tax regime would face penalties. Street cart sellers remain exempt.
Addressing broader economic concerns, Aurangzeb said Pakistan’s economy remained stable despite tensions in the Middle East.
“We overcome our challenges via our own resources, and didn’t take assistance from anyone,” he said.
