FBR Bars Tax Officers From Entering Shops Displaying Green Plate

The Federal Board of Revenue (FBR) has introduced a draft special tax procedure for small shopkeepers, under which Inland Revenue officers will not be allowed to enter registered shops displaying an official FBR “Green Plate.”

Issued through S.R.O. 1109(I)/2026, the proposed scheme applies to individual retailers with an annual turnover of up to Rs. 200 million for tax year 2026. Eligible shopkeepers will file a simplified tax return through the IRIS web portal or a dedicated mobile application, declaring sales, purchases, expenses, net profit, and legitimate assets.

The forms will also be available in Urdu and regional languages.

Under the scheme, eligible retailers will pay income tax at the rate of 1 percent of gross turnover and may adjust withholding tax against their liability.

However, participants must pay a minimum tax of Rs. 25,000 with their annual return, or the tax payable after adjustments, whichever is higher.

Registered shopkeepers will receive an FBR compliant Green Plate featuring a QR code, the owner’s name, National Tax Number, and shop address. According to the FBR, no tax officer or official will be permitted to enter a shop displaying the plate for tax related matters.

The optional scheme is not available to retailers with annual turnover exceeding Rs. 200 million in any of the previous three years, owners of multiple shops, Tier 1 retailers, jewelry sellers, or providers of professional services such as doctors, engineers, and lawyers. Existing retailers who filed returns for tax year 2025 may also opt into the scheme, provided they do not reduce their tax liability or restructure their business to qualify.

The FBR aims to bring more than three million retailers into the fixed tax scheme, and participants will generally not be subject to tax audits. However, the FBR may initiate proceedings based on third party information involving unusual business transactions, acquisition of expensive assets, or suspected misuse of the scheme to evade taxes.

Eligible retailers opting for the scheme will also be exempt from installing a Point of Sale (POS) system or digital invoicing infrastructure.

The FBR expects the scheme to generate more than Rs. 50 billion in annual tax revenue if it succeeds in bringing small retailers into the tax net. Retailers who neither opt for the scheme nor file a regular income tax return will face penalties of Rs. 10,000 for the first default, Rs. 25,000 for the second, and Rs. 50,000 for the third. The FBR said there will be at least a one month gap between default proceedings.

The FBR has invited objections and suggestions on the draft within seven days of its publication in the official Gazette before finalizing the procedure.