ISLAMABAD: The government is contemplating different options for introduction of a fixed scheme for retailers to bring them into the tax net in the upcoming budget for financial year 2026-27, it has been learnt.
After failure to achieve any success from the Tajir Dost Scheme (TDS), the government is discussing various options with the retailers for bringing them into the tax net. However, the specific proposals of any fixed scheme have not yet been discussed with the visiting IMF mission as part of budgetary and fiscal framework agreed upon by both sides. “We are discussing with the concerned stakeholders a new scheme for retailers, keeping in view experiences of the past. There is a need to find a solution to convince the retailers to come into the tax net by reducing their mistrust and restoring confidence in taxation system,” top official sources, who are preparing the budget for 2026-27, confirmed here on Saturday.
The last TDS, a poorly designed scheme, failed whereby retailers were asked to file a simplified form twelve times and then file their annual return as well on the basis of area. The official conceded that several such schemes met with failure in the past in the last 30-year period.
“We are going to discuss major aspects of retailers’ scheme with the IMF team next week. It will only be made a part of the Finance Bill if the Fund staff grants assent,” said the sources. On the other hand, the tier-1 retailers and Chainstore Association of Pakistan (CAP) Chairman Asfandyar Farrukh and Secretary General Malik Asim Dogar, in their written proposal forwarded to the budget makers, made five major demands to be incorporated into the coming budget.
They asked the government to introduce a predictable 3-year roadmap to gradually reduce the standard GST rate on goods from 18 per cent to 15pc by 1pc each year (17pc in FY2026-27, 16pc in FY2027-28, and 15pc in FY 2028-29) to support documented trade, business planning, investment and competitiveness, while improving compliance incentives when paired with documentation measures. They proposed removing “digital payments acceptance” as a Tier-1 trigger (to avoid discouraging digital payments adoption) and shifting to objective, scale-linked thresholds implemented through a phased, enablement-first rollout that excludes micro/small retailers while capturing all medium/large under-documented businesses to increase the number of integrated retailers.
They propose to restore the prize scheme for POS receipts and reintroduce a consumer incentive linked to verified FBR-POS/e-invoices to strengthen receipt demand and invoice issuance. The primary design is a capped income tax credit for filers (with verification via registered mobile number and entitlement through the tax profile/return), with a secondary Phase-2 option of micro-rewards via wallets/top-ups once operational integrations are ready.
It is proposed a facilitation-first package to coax (not threaten) fully/partially informal businesses to gradually declare true turnover and income and pay due taxes, including a time-bound Past-Period Record Certainty Window to mitigate fear barriers, a compliance ladder with simplified filings and risk-based enforcement after the transition period.
It is also proposed to replace high-friction e-commerce sales tax withholding with a simpler compliance model that proposes removing/replacing multi-agent sales tax withholding by intermediaries in domestic e-commerce and shifting to seller self-assessment supported by standardised third-party reporting and risk-based enforcement.
