Inland Revenue officers barred from entering small shops

The Federal Board of Revenue (FBR) has introduced a draft Special Procedure for Small Shopkeepers, under which Inland Revenue officers will not be allowed to enter the premises of compliant retailers displaying the FBR-issued "Green Plate." The proposal was issued through S.R.O. 1109(I)/2026 and is aimed at encouraging voluntary tax compliance among small businesses.

 

Under the proposed scheme, eligible shopkeepers will file a simplified income tax return through the IRIS web portal or a dedicated mobile application. The return will require basic financial information, including total annual sales, purchases, business expenses, net profit, and details of legitimate assets. The form will also be available in Urdu and regional languages to make compliance easier.

 

Participating retailers will pay income tax at the rate of 1% of their gross annual turnover. They will be allowed to adjust income tax already withheld against their tax liability. However, they must pay a minimum cash tax of PKR 25,000 when filing their return, regardless of the amount of tax already deducted at source. The final tax payable will be the higher of the adjusted tax liability or PKR 25,000.

 

Every eligible retailer opting into the scheme will receive an FBR-issued "Green Plate" displaying a QR code, the taxpayer's name, National Tax Number (NTN), and business address. The QR code will contain information about the shop's location and ownership. According to the FBR, tax officials will not enter the premises of bona fide retailers displaying the Green Plate for tax-related matters.

 

The proposed procedure will apply to individual retailers with annual turnover of up to PKR 200 million for the 2026 tax year.

 

However, the scheme will not be available to individuals whose turnover exceeded PKR 200 million in any of the previous three years, owners of more than one retail outlet, Tier-I retailers, jewellery sellers, and professionals such as doctors, engineers, and lawyers.

 

Retailers who filed income tax returns for Tax Year 2025 may also opt for the simplified regime, provided that their tax liability under the new scheme is not lower than what they paid in 2025 and they have not split or renamed their businesses to become eligible.

 

Registration will be available through the IRIS portal, the dedicated shopkeepers' mobile application, or by visiting the nearest FBR tax office for assistance.

 

The proposed regime will remain voluntary, allowing eligible retailers to either adopt the simplified tax system or continue filing returns under the existing income tax laws.