# Govt weighs reprieve for 1.2m traders

> Pakistan government considers 3-month reprieve for 1.2m traders facing tax penalties.
- Title: Govt weighs reprieve for 1.2m traders · The Express Tribune
- Summary: Pakistan government considers 3-month reprieve for 1.2m traders facing tax penalties.
- Keywords: pakistan, tax scheme, traders, government, tax penalties, 1.2m traders, tax authorities, finance minister, tax law, penalties, The Express Tribune
- Source: The Express Tribune — https://tribune.com.pk/story/2638872/govt-weighs-reprieve-for-12m-traders
- Author: Shahbaz Rana
- Published: 2026-11-05T21:57:08+00:00
- Read time: 1 min
- Topics: pakistan, tax scheme, traders, government, tax penalties, 1.2m traders, tax authorities, finance minister, tax law, penalties, news
## Government identifies 1.2m traders
The government has digitally identified nearly 1.2 million shopkeepers who own a single shop but did not opt for the new tax scheme.
## Two tax options proposed
Tax authorities presented two options to Finance Minister Muhammad Aurangzeb: a three-month extension with a Rs85,000 surcharge or immediate enforcement under normal tax law.
## Immediate penalty risk
Enforcement under normal tax law would trigger a minimum penalty of Rs175,000, tax audit exposure, and complete asset disclosure.
## Government seeks legal advice
Minister of State for Finance Bilal Azhar Kayani informed the National Assembly Standing Committee on Finance that the government would seek attorney general's opinion before enforcement.
## Scheme launch and failure
The fixed income tax scheme for traders offered 1% tax on sales for complete audit exemption but only 222 traders filed returns by October 31.
## Penalty structure
Rule 10 states penalties of Rs10,000 on first default, Rs25,000 on second, and Rs50,000 on third for traders who don't file returns or opt for the scheme.
## Current status of traders
Out of 1.5 million retailers identified, 290,000 were already in the tax system while 390,000 opted not to file returns under the new scheme.
## Government's next move
The government plans to issue tax notices to 6,000 shopkeepers who have been physically verified by tax authorities.
## Key takeaway

Pakistan's government is weighing a three-month extension for 1.2 million traders to avoid immediate penalties under tax law.