The upcoming Finance Bill (2025-26) is set to introduce a fresh registration scheme for shopkeepers and traders, aiming to learn from the shortcomings of the Tajir Dost Scheme.
According to officials, the Federal Board of Revenue (FBR) has finalized the draft for this initiative, which will be unveiled in the **2025-26 budget**. However, key stakeholders, such as traders’ associations, have not yet been consulted on its framework. Under the previous Tajir Dost Scheme, approximately 70,000 to 75,000 retailers were brought into the tax net, generating revenues in the millions.
Despite this, trader representatives have voiced strong opposition to the new registration plan, arguing that recent tax reforms, particularly the introduction of Sections 236G and 236H in the Income Tax Ordinance 2001, already provide an efficient mechanism for tax collection.
Under Section 236G, advance tax on purchases from manufacturers and commercial importers by distributors, dealers, and wholesalers was lowered from 2% (non-filers) to 0.1% (filers). Similarly, Section 236H reduced the advance tax on sales to retailers by these entities from 2.5% (non-filers) to 0.5% (filers).
This means non-filers still face a tax burden of 2% (236G) and 2.5% (236H), creating a clear distinction between compliant and non-compliant businesses. Traders argue that, instead of introducing another scheme, the FBR should utilize data from these sections to bring unregistered retailers into the tax net. They believe the revenue potential from 236G and 236H far surpasses that of the Tajir Dost Scheme, making a new initiative unnecessary.