FBR Raises Concern Over Weak Response to Fixed Tax Scheme

The Federal Board of Revenue (FBR) has expressed concern over the weak response to its fixed tax scheme for retailers, with only four new traders filing returns by the September 30 deadline.

FBR Chairman Rashid Mahmood Langrial told the Senate Standing Committee on Finance that the response remained below expectations. He warned that the government could take stronger enforcement measures if compliance did not improve.

FBR Member Operations Zubair Bilal said 787 returns had been filed under the scheme. Only four came from new filers. The figures prompted concern about the government’s effort to bring more retailers into the tax net.

FBR Plans Enforcement

Minister of State for Finance Bilal Azhar Kayani said the government would give traders more time to comply before taking stronger action.

The FBR plans to monitor retailers for about a month. Officials have warned that non-compliant traders could face enforcement measures.

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The government has also introduced penalties in stages. The first penalty will be Rs10,000. The second will be Rs25,000, followed by Rs50,000 at the third stage.

The scheme offers retailers a 1% fixed tax arrangement. In return, qualifying traders receive relief from audit and point-of-sale installation requirements.

FBR officials said the government had consulted traders before introducing the scheme. The scheme covers retailers with annual sales of up to Rs200 million.

Thousands Registered, Few Filed

According to officials, 10,338 retailers had registered through the application within two months. The registrations included 2,337 new entrants.

However, only 787 retailers had filed returns under the scheme by the deadline. Officials also acknowledged technical problems with the application.

The FBR said it was working to resolve practical and technical difficulties during the scheme’s initial implementation phase. It has asked traders facing registration problems to seek assistance from the tax authority.

The government aims to bring between 500,000 and one million additional traders into the tax system. Officials estimate that about 3.7 million traders remain outside the tax net.

FBR officials said successful implementation could generate more than Rs100 billion annually from traders. A failure to attract sufficient participation, however, could result in very limited collections.

Tax Filing Deadline Extended

Meanwhile, the government has extended the income tax return filing deadline for tax year 2026 by 15 days.

The new deadline is October 15. The FBR granted the extension after receiving requests from trade bodies and tax bar associations.

The FBR received about 5.767 million returns by midnight on September 30. That figure was 45% higher than the 3.98 million returns filed by the same date last year.

Taxpayers had reported problems with the filing system operated by Pakistan Revenue Automation Limited (PRAL). The extension gives taxpayers additional time to complete their returns.

FBR Exceeds First-Quarter Target

The FBR collected about Rs3.083 trillion during the July-September quarter of fiscal year 2026-27. The figure exceeded the quarterly target of Rs3.053 trillion by around Rs30 billion.

Revenue grew about 7% compared with Rs2.889 trillion collected during the same period last year. Sales tax and federal excise duty helped the FBR exceed its quarterly target, while income tax and customs collections remained below their respective targets.

For the full fiscal year, the government has set an FBR revenue target of Rs15.263 trillion. The target requires significantly stronger growth than the previous year.

The FBR’s performance also remains important for Pakistan’s ongoing engagement with the International Monetary Fund. The revenue targets form part of the country’s broader fiscal commitments.