The Federal Board of Revenue (FBR) has proposed a new special tax procedure for small retailers that could significantly change how registered shopkeepers interact with tax authorities. Under the draft scheme, Inland Revenue officers will not be allowed to enter registered shops displaying the official FBR “Green Plate” for tax-related matters.
The proposal aims to simplify tax compliance for eligible retailers while encouraging more businesses to become part of the formal tax system.
The draft procedure has been issued through S.R.O. 1109(I)/2026, and the FBR has invited public feedback before finalizing the scheme.
Who Can Benefit From the Green Plate Scheme?
The proposed scheme applies to individual retailers with an annual turnover of up to Rs. 200 million for the tax year 2026.
Eligible shopkeepers will be able to submit a simplified income tax return through the IRIS web portal or a dedicated mobile application.
The simplified return will require retailers to declare:
- Sales
- Purchases
- Expenses
- Net profit
- Legitimate assets
To make the process more accessible, the FBR will also provide the forms in Urdu and regional languages.
Simplified Tax Payment Structure
Under the proposed procedure, eligible retailers will pay income tax at the rate of one percent of gross turnover.
In addition, they will be allowed to adjust withholding tax against their total tax liability.
However, participants must pay a minimum annual tax of Rs. 25,000 when filing their return. If the calculated tax liability after adjustments exceeds this amount, they will pay the higher figure instead.
The simplified structure is intended to reduce compliance difficulties while maintaining tax collection.
What Is the FBR Green Plate?
Retailers registered under the scheme will receive an official FBR “Green Plate.”
The Green Plate will display:
- A QR code
- The owner’s name
- National Tax Number (NTN)
- Shop address
According to the proposed procedure, no tax officer or official will be permitted to enter a shop displaying the plate for tax-related matters.
This measure is designed to provide greater confidence and certainty to compliant retailers participating in the scheme.
Who Cannot Join the Scheme?
The Green Plate scheme will not be available to every retailer.
According to the draft proposal, the following businesses will not qualify:
- Retailers with an annual turnover exceeding Rs. 200 million in any of the previous three years.
- Owners operating multiple shops.
- Tier-1 retailers.
- Jewelry sellers.
- Providers of professional services, including doctors, engineers, and lawyers.
Existing retailers who filed income tax returns for tax year 2025 may also opt into the scheme.
However, they must not reduce their existing tax liability or restructure their business solely to become eligible.
Limited Audit Exposure for Participants
The FBR also plans to reduce compliance burdens for participating retailers.
According to the proposal, shopkeepers who join the scheme will generally not be subject to audit.
This provision aims to encourage voluntary participation while making tax compliance more predictable for small businesses.
The tax authority hopes the initiative will bring more than three million retailers into the fixed tax system.
Public Feedback Invited Before Final Approval
The Green Plate scheme remains a draft proposal and has not yet been finalized.
The FBR has invited objections and suggestions from stakeholders within seven days of the draft’s publication in the official Gazette.
After reviewing the feedback, the tax authority will finalize the special tax procedure.
If approved, the scheme could introduce a simplified taxation framework for eligible retailers while offering registered businesses greater protection from routine tax-related inspections.
