The Federal Board of Revenue (FBR) has issued the special procedure for the Retailers Fixed Tax Scheme for Tax Year 2026, outlining eligibility criteria, exemptions, and compliance requirements for small and medium-sized retailers across Pakistan.
According to the newly issued guidelines, the scheme is applicable to individuals earning income through retail shops with an annual turnover of up to Rs200 million. The initiative is designed to simplify tax compliance for eligible retailers while encouraging greater participation in the formal tax system.
However, the FBR has clarified that several categories of taxpayers will not qualify for the scheme. These include owners of more than one retail outlet, Tier-1 retailers, and certain professionals who fall under separate tax regulations.
The special procedure also sets conditions for taxpayers who filed their Tax Year 2025 income tax returns. Eligible retailers must meet the prescribed filing and compliance requirements to benefit from the fixed tax scheme during the 2026 tax year.
In addition, the FBR stated that the scheme will not apply to businesses whose annual turnover exceeded Rs200 million in any one of the previous three tax years. Such businesses will continue to be taxed under the applicable standard tax regime.
The Retailers Fixed Tax Scheme is part of the FBR’s broader efforts to improve tax documentation, simplify compliance procedures, and expand the country’s tax base. Officials believe the initiative will make it easier for eligible retailers to fulfil their tax obligations while ensuring transparency in the retail sector.
Retailers are encouraged to review the eligibility criteria and comply with the applicable conditions before opting for the scheme. The FBR is expected to issue additional guidance, if required, to facilitate implementation during Tax Year 2026.
