The government’s fixed tax scheme for retailers has attracted only two new taxpayers so far. This comes despite an annual collection target of Rs. 50 billion. However, the scheme has managed to collect just Rs. 26 million to date.

Out of 317 shopkeepers who joined the scheme, only two were genuinely new to the tax system. Meanwhile, the remaining 315 had already registered as taxpayers. Therefore, the scheme has made little progress in bringing previously unregistered retailers into the tax net.

Meanwhile, the Federal Board of Revenue is preparing to impose penalties on retailers who fail to use its Aasaan Tax Scheme. Around 5,000 retailers have registered for this simplified filing facility. Still, the response has remained limited. Retailers have filed only 332 returns so far, paying Rs. 26.5 million in taxes.

According to separate figures, one of the two new shopkeepers under the scheme is from Quetta and the other from Rawalpindi. Additionally, 44 new retailers have prepared their returns but have not yet submitted them. Overall, 6,631 retailers have prepared draft returns, though around 6,587 of them were already tax filers.

Rawalpindi recorded the highest participation at 87 retailers, but only one was a new filer. Lahore followed with 61 participants, while Karachi had 24, Sahiwal 33, Sialkot 25 and Islamabad 23. Across all these cities, new filers remained very limited.

Against the Rs. 50 billion target, the scheme has collected only Rs. 26 million so far. This averages roughly Rs. 81,944 per participating retailer. As a result, the FBR has decided to introduce penalties for non-compliance. Registered retailers who fail to exercise either option under the scheme will face fines. The penalty starts at Rs. 10,000 for the first month, rising to Rs. 25,000 for the second and Rs. 50,000 for the third.

The fixed tax scheme applies a 1 percent tax on annual sales for eligible small retailers. In exchange, participating shopkeepers avoid tax audits, point of sale installation and withholding tax duties. Furthermore, the scheme bars FBR staff from entering the business premises of covered retailers.

The scheme applies to single-outlet retailers whose annual sales stayed below Rs. 200 million over the previous three years. With the September 30 deadline approaching, the government has started reviewing its approach. Minister of State for Finance Bilal Azhar Kayani chaired a meeting where officials discussed the scheme’s design and its future direction.

The Ministry of Finance said the meeting decided to step up awareness efforts. Also, the minister directed tax commissioners to coordinate with local tax bars to help retailers file returns through lawyers of their choice.

Instead of matching this weak response, income tax filing overall has seen a broader increase. The FBR has received 3.5 million income tax returns so far this year, compared with 2.5 million during the same period last year. Finally, taxpayers paid around Rs. 10 billion alongside these income tax returns, reflecting stronger compliance outside the retailers’ scheme.