KARACHI: Small trader associations in Karachi have welcomed the federal government’s decision to introduce a 1% turnover tax and a fixed tax regime for businesses with annual turnover of up to Rs200 million, calling it a positive step towards simplifying tax compliance and expanding the tax base.
Representatives of various trader organizations said the new scheme would reduce the burden of complicated tax procedures and provide certainty to small and medium-sized businesses. They also expressed hope that taxpayers opting for the fixed tax regime would not face additional tax demands or audit-related issues.
President of the Karachi Electronics Dealers Association, Rizwan Irfan, said the 1% turnover tax would make taxation easier for traders and help eliminate complex tax matters. He added that transparent implementation of the scheme could encourage more businesses to become part of the formal tax system.
Chairman of the Karachi Wholesale Grocers Association, Rauf Ibrahim, stated that trader bodies had long advocated for a simplified turnover-based taxation model and welcomed the government’s decision to adopt their proposal. He described the move as timely and said it has boosted confidence among small traders.
According to Ibrahim, the scheme would require small traders to pay a modest amount of tax, making compliance easier without creating significant financial pressure on businesses. He urged traders to support the initiative and contribute to strengthening the country’s tax culture.
Anjuman Tajiran Karachi representative Javed Shams also welcomed the fixed tax regime and the Rs200 million turnover threshold. He said trader organizations are working to bring a larger number of businesses into the documented economy and appreciated the government’s acceptance of key trader recommendations in the Budget 2026-27.
Trader leader Sharjeel Goplani noted that extensive consultations had taken place between the government and trader representatives before finalizing the scheme. He said traders are willing to pay taxes under a simple and predictable system and expect relief from unnecessary audits and additional tax complications.
Business leaders believe the simplified taxation framework will encourage voluntary compliance, improve tax collection, and attract more traders into the tax net. They argue that a transparent and easy-to-understand tax system can promote business growth while supporting the government’s efforts to document the economy.
The 1% turnover tax and fixed tax regime are expected to become one of the key measures aimed at improving tax compliance among small and medium-sized enterprises in Pakistan.
