Islamabad:Following intense negotiations and mounting pressure from the business community, the Federal Board of Revenue (FBR) has agreed to provide significant tax relief to small traders and retailers across Pakistan.
In a meeting with representatives of the All Pakistan Anjuman-e-Tajiran, FBR officials announced that cash deposits of up to PKR 200,000 in bank accounts will no longer be subject to withholding tax. The move comes after widespread opposition to recent tax measures and the threat of nationwide protests by traders.
Small Traders Exempt from Digital Invoicing
According to FBR, the digital invoicing system will only apply to large, sales tax–registered businesses operating in a business-to-business (B2B) capacity. Small traders and retail shopkeepers will not be required to comply with this system.
Additionally, FBR clarified that Sections 37A and 37B of the Sales Tax Act, which allow for legal action against tax evaders, will not apply to small traders. Even large industrialists will be exempt from arrest under these provisions, with the intent being to target only fake invoicing and fraud, not legitimate business operations.
Traders Included in Policy Committees
In a key development, the FBR also agreed to include trader representatives in its digitalization and policy-making committees, ensuring that future decisions will reflect the ground realities of small business owners.
FBR further committed to:
Developing a new mechanism for customs raids on markets in consultation with trader bodies.
Seeking input from traders on upcoming reforms related to taxation on mobile phones and electronics.
Traders’ Response
Leaders from the trader delegation — including Kashif Chaudhry, Salman Siddiqui, and Sharjeel Mir — welcomed the development, terming it a “positive step toward a fairer tax regime.” However, they reiterated that arbitrary and excessive taxation would continue to be resisted.
