The Federal Board of Revenue (FBR) has introduced a simplified and voluntary income tax regime for small shopkeepers, aiming to broaden the country's narrow tax base.

Under this proposal, individual retailers with an annual turnover of up to Rs200 million can opt to pay 1% of their gross turnover as income tax instead of filing returns under the normal regime.However, they must pay a minimum cash tax of Rs25,000, and excess withholding tax will not be refundable.The scheme excludes certain categories like tier I retailers, jewellers, and professionals.Retailers can join via the IRIS portal or mobile app, with exemptions from audits and digital invoicing.Non-compliance will face escalating penalties, including fines of Rs10,000, Rs25,000, and Rs50,000 for repeated defaults.

The draft will be finalized after public consultation, offering flexibility for eligible shopkeepers to choose between the simplified regime or regular returns.