digital invoicing

The Federal Board of Revenue (FBR) has proposed a voluntary tax regime for small shopkeepers with annual turnover up to Rs200 million, offering a 1% gross turnover tax rate and exemptions from audits, withholding tax, and digital invoicing. The scheme excludes retailers with prior high turnover, multiple shops, or specific professions like doctors and lawyers.

The government introduced a 'small trader scheme' offering a 1% voluntary turnover tax for retailers with annual sales up to Rs200 million, criticized as a political compromise that avoids documentation requirements like audits and digital invoicing. Critics argue it entrenches cash-based practices and widens the tax base distortion, as the corporate sector contributes disproportionately to tax revenues despite representing only 6% of GDP.