Islamabad: The federal government on Wednesday launched the Retailer Scheme App to simplify tax compliance for small shopkeepers and facilitate their entry into the formal tax system.
Finance Minister Muhammad Aurangzeb, who launched the application alongside Minister of State for Finance Bilal Azhar Kayani and Federal Board of Revenue (FBR) Chairman, said the new tax framework provides separate treatment for small retailers and other categories of businesses.
The scheme has been designed as a simplified and optional tax regime. Small retailers who prefer to remain under the regular tax system can continue to do so, Aurangzeb said. Kayani said the app was developed for both registered taxpayers and shopkeepers currently outside the tax net. It will allow retailers to become filers and enable small shopkeepers to submit their tax returns through their mobile phones.
Retailers covered by the scheme will not be required to install Point of Sale (POS) systems, while small retailers will be subject to a minimum annual tax of PKR 25,000. The government also plans to make the application available in local languages by the first week of September to improve accessibility for traders across the country.
The Retailer Scheme App forms part of the government’s efforts to broaden the tax base and make compliance easier for small businesses. Kayani said effective implementation of the scheme could bring millions of traders into the formal tax system and help broaden the contribution to government revenues.
The government introduced the fixed tax regime for small retailers in June. Under the scheme, retailers with annual sales of up to PKR 200 million are liable to pay tax at a rate of 1% of their declared annual turnover. Eligible retailers seeking to join the simplified regime are required to submit a one-page declaration and pay the applicable tax based on their annual turnover.
Retailers opting for the regime will be exempt from POS requirements, routine tax audits and withholding-agent responsibilities. However, taxes already deducted through utility bills and other sources will remain adjustable against their final tax liability. The government has described the simplified framework as part of its broader effort to expand the tax base while reducing compliance difficulties for small businesses.
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