FBR fixed tax scheme for small shopkeepers: a plain guide
What FBR's Special Procedure for Small Shopkeepers says: who can use it, the 1% tax and the Rs 25,000 minimum, the short return, the Green Plate, and what happens if you do nothing. Written for building-material dealers, from FBR's own notification.
Last checked: 11 November 2026. This is general information, not tax advice. Everything below comes from FBR's notification S.R.O. 1166(I)/2026 dated 27 July 2026. FBR can change the rules or dates by a new notification, so confirm on fbr.gov.pk or with your tax adviser before you file.
In short
- It is an optional way for small shopkeepers to pay income tax for tax year 2026: 1% of gross turnover, with a minimum of Rs 25,000 paid with the return.
- It is for individuals earning mainly from a retail shop with turnover up to Rs 200 million (Rs 20 crore) a year.
- You file a short return: sales, purchases, expenses, net profit and your assets, on IRIS or FBR's app for shopkeepers.
- Shopkeepers who opt in get a Green Plate for the shop, are generally not audited, and are not required to install a sales tax POS system or digital invoicing.
- If you neither file a regular return nor opt in by the due date, the notification sets penalties of Rs 10,000, Rs 25,000 and Rs 50,000 for the first, second and third default.
The news often calls it the fixed tax scheme or the Asaan tax scheme. FBR's notification calls it the Special Procedure for Small Shopkeepers.
Who can use it
The notification applies to individuals earning income mainly through retail shops with annual turnover up to Rs 200 million. It does not apply to:
- anyone whose turnover went over Rs 200 million in any one of the preceding three years;
- anyone who owns more than one shop;
- Tier-1 retailers;
- sellers of jewellery;
- providers of professional services, such as doctors, engineers and lawyers.
It covers shop income only; any other income is outside it. Retailers who filed a return for tax year 2025 can also use it, as long as their tax is not lower than in 2025 and they have not split up or renamed their business to qualify.
What this means for a building-material dealer
- Turnover is the first check. Rs 200 million is a lot for a small shop, but not for a busy steel or cement dealer: at, say, Rs 250,000 a ton, it is about 800 ton of sariya in a year. Look at your sales for each of the last three years.
- It is written for an individual with one retail shop. If you own more than one shop, your business is a company or partnership, or most of your sales are wholesale, ask your adviser whether you qualify. The notification says no more than what is above.
- Sales tax is separate. The notification is made under the Income Tax Ordinance. It says eligible shopkeepers do not have to install a sales tax POS system or digital invoicing infrastructure; if you are registered for sales tax, check with your adviser how that applies to you. Our FBR Digital Invoicing guide explains digital invoicing.
How much tax
- Tax is 1% of gross turnover.
- You can deduct income tax already withheld from you.
- You pay at least Rs 25,000 in cash with the return, whatever was withheld. In the notification's words: tax payable (less withholding) or Rs 25,000, whichever is higher.
- If more tax was withheld from you than this, there is no refund.
| Annual sales | 1% tax | Already withheld | You pay with the return |
|---|---|---|---|
| Rs 30,000,000 (3 crore) | Rs 300,000 | Rs 40,000 | Rs 260,000 |
| Rs 4,000,000 (40 lakh) | Rs 40,000 | Rs 20,000 | Rs 25,000 (the minimum) |
| Rs 1,500,000 (15 lakh) | Rs 15,000 | none | Rs 25,000 (the minimum) |
Under this procedure you also do not have to withhold tax on your purchases under section 153, and the minimum tax under section 113 and the 1.25% rate do not apply. You get credit for imputable income based on the tax you pay, to support your personal expenses and the growth of your assets.
How to opt in and file
- Register with FBR on the IRIS web portal, on FBR's mobile app for shopkeepers, or at your nearest tax office, which will help you register.
- File the simplified return (Annex-I of the notification, "Easy Tax Return for Small Retailers") on IRIS or the app. It asks for:
- your name, CNIC number, business name and address, and the goods you buy and sell;
- annual sales, annual purchases, business expenses, net profit, and other income if any;
- tax already paid (withholding) and tax paid with the return; the system works out the total tax and imputed income;
- your assets: business capital, property, cash in bank, cash in hand and other assets.
- Pay the tax, at least Rs 25,000, with the return.
FBR says the form is available in Urdu and regional languages. The notification does not give the due date; check it on IRIS or fbr.gov.pk.
Keep the figures ready
The return needs a year's sales, purchases, expenses and net profit. If you run your shop on KeyTup, the Profit & loss report shows sales, expenses and net profit for any dates you choose, and every purchase bill is in Purchases. Tax year 2026 runs from 1 July 2025 to 30 June 2026.
The Green Plate
Every bona fide shopkeeper who qualifies and opts in is issued a compliant shopkeeper plate, the Green Plate, to put up outside the shop. It carries an FBR QR code, the shopkeeper's name, NTN and address; the QR code holds the shop's location and ownership details. The notification says no FBR officer or official shall enter the shop on the tax matters of a bona fide shopkeeper while the plate is displayed.
Audit
Shopkeepers who opt in are generally not subject to audit. FBR may start proceedings only in consultation with representatives of trade associations, when it receives third-party information about significant or unusual transactions, buying or owning expensive assets, or gross misuse of the procedure to avoid tax.
If you do nothing
If a shopkeeper neither files a regular income tax return nor opts for this procedure by the due date, the notification sets penalties of Rs 10,000 for the first default, Rs 25,000 for the second and Rs 50,000 for the third, with at least one month between each.
Questions
Is the fixed tax scheme compulsory?
No. The notification says it is optional: you can pay under it or file a regular income tax return. You must do one of the two, or the default penalties apply.
What is the tax rate?
1% of gross turnover, less income tax already withheld, with a minimum of Rs 25,000 paid in cash with the return. Withholding above that is not refunded.
Can a steel or cement dealer use it?
Yes, if you are an individual earning mainly from one retail shop and your turnover stayed within Rs 200 million in each of the last three years. Bigger dealers, people with more than one shop and Tier-1 retailers are outside it.
Do I still need an FBR POS or digital invoicing?
The notification says eligible shopkeepers under this procedure are not required to install a sales tax POS system or digital invoicing infrastructure. If you are registered for sales tax, confirm with your adviser how this applies to you.
Which year does it cover?
Tax year 2026, which runs from 1 July 2025 to 30 June 2026. Check fbr.gov.pk for any later notification that extends or changes it.
Sources
- S.R.O. 1166(I)/2026, Special Procedure for Small Shopkeepers, 27 July 2026 (made under section 99B of the Income Tax Ordinance, 2001, after the draft S.R.O. 1109(I)/2026 of 14 July 2026)
- FBR and IRIS