ISLAMABAD: The head of Pakistan’s largest retail industry body has thrown his support behind the government’s newly announced fixed tax scheme for small retailers, calling it a credible first step towards bringing millions of informal shopkeepers into the formal tax net.
In a statement, Chairperson of the Pakistan Retail Business Council Ziad Bashir said that the scheme marks a decisive break from the approach that doomed its predecessor, the widely criticised Tajir Dost Scheme, which generated near-zero voluntary uptake despite repeated extensions and enforcement threats. He also cautioned that its success depends entirely on how it is implemented.
Pakistan has an estimated 3.5 million retail outlets. Fewer than 50,000 currently file a tax return. Bashir argued this gap is not the result of dishonesty among traders, but of a system that made formalisation costly and unpredictable. “The informal retail sector is informal because the cost of being formal has always outweighed the benefit,” he said.
On Tajir Dost, Bashir was blunt: the scheme failed because it asked traders to trust an institution that had historically treated them as adversaries. Enrolment was compelled rather than incentivised, deadlines were extended repeatedly, and traders’ associations mounted sustained resistance.
The new fixed tax scheme, he said, takes a different approach, offering a flat rate of one percent on turnover, a minimum annual payment of Rs25,000, no mandatory point-of-sale systems, no unannounced inspections, and no automatic audit presumption for those who sign up. He described it as “a peace-of-mind offer” for shopkeepers who have long feared that entering the formal system would expose them to unpredictable tax demands.
Bashir added that the scheme sends an overdue signal that the government is serious about widening the tax net and that the burden will eventually be shared more equitably.
Despite his endorsement, he set out clear conditions for success: penalty provisions must be enforced consistently, genuine uptake must go well beyond any minimum threshold, and building turnover visibility across millions of small outlets will require sustained institutional investment.“Whether it does [succeed] depends entirely on the consistency and good faith with which it is implemented,” he said.
