Traders Reject FBR’s APP Scheme, Only 222 File Returns
ISLAMABAD: The Federal Board of Revenue’s (FBR) new tax initiative for traders and shopkeepers has received a poor response, with only 222 out of an estimated 3.5 million potential new taxpayers filing returns under the scheme by October 31, 2026.
The scheme was introduced on the federal government’s directives to bring millions of traders and shopkeepers into the tax net through a simplified tax structure.
What is the FBR APP Scheme?
Under the FBR APP Scheme, eligible traders are required to pay an annual fixed tax of Rs25,000. The scheme also offers incentives such as exemption from audits and simplified accounting procedures. The Ministry of Finance had set a revenue collection target of Rs50 billion from the initiative.
However, the government has reportedly collected only Rs90 million so far, highlighting a major gap between expected and actual tax receipts.
Salaried Class Pays More, Traders Stay Outside Tax Net
The low participation has raised questions about the effectiveness of the government’s efforts to broaden the tax base.
Meanwhile, salaried individuals continue to shoulder a substantial share of the country’s income tax burden. Salaried Pakistanis contributed approximately Rs633 billion in income tax, while millions of businesses and traders remain outside the documented tax system. The contrast has renewed concerns about the fairness of Pakistan’s taxation system.
FBR Faces Pressure to Expand Tax Net
The government has repeatedly emphasised the need to expand the tax net rather than relying heavily on existing taxpayers. However, the initial response to the traders’ tax scheme suggests that achieving this objective will require stronger implementation, greater documentation and improved compliance.
The FBR is expected to face continued pressure to increase trader participation and improve revenue collection as the government seeks to meet its fiscal targets.
FBR Records Rs129 Billion Shortfall
According to media reports, the FBR received approximately 7.56 million income tax returns by October 31, 2026, with total admitted tax of Rs100.6 billion.
The FBR faced a tax shortfall of Rs129 billion during the first four months of the current fiscal year, from July to October, despite recording a 7% increase in tax collection compared to the same period last year.
According to sources, the FBR collected Rs4,088.2 billion in taxes between July and October, against the target of Rs4,217 billion set for the period.
Rs15,264 Billion Annual Target
The revenue authority has been assigned a tax collection target of Rs15,264 billion by June 2027. To achieve this target, the FBR will need to maintain a growth rate of 17%.
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