Finance Minister Muhammad Aurangzeb reaffirmed the government’s commitment to transitioning Pakistan towards a cashless economy, unveiling plans to introduce new measures aimed at expanding digital payment systems and curbing reliance on cash transactions. These initiatives will form a key part of the upcoming federal budget.
In a series of consultations with commercial banks, regulators, development financial institutions, and industry stakeholders, the minister outlined strategic proposals designed to capture the largely undocumented economy through digitisation. These include imposing additional taxes on cash transactions, offering incentives for digital payments, and prohibiting cash payments in selected critical sectors to be identified by the Federal Board of Revenue (FBR) in collaboration with Karandaaz, Pakistan Revenue Automation Limited, and the banking sector.
The finance ministry emphasised broadening access to digital financial services and encouraging widespread adoption of instant payment systems such as Raast.
Officials noted the growing availability of digital payment options across retail, services, and public sectors and highlighted the need to create a level playing field that favors digital transactions by making them more attractive and cost-efficient for both consumers and merchants.
The government also plans to enhance interoperability among different digital platforms to improve consumer choice and convenience.
Aurangzeb underscored the urgency of these reforms, stating that a shift to a cashless economy is not merely aspirational but essential for Pakistan’s long-term fiscal stability, competitiveness, and inclusive growth. He called for coordinated efforts to establish a payments ecosystem that is secure, interoperable, and easy to use for all citizens.
“Digitalisation is the foundation of a modern financial system. We must move swiftly to create an environment where digital payments become the default, ensuring transparency and expanding the tax base,” the minister said.
The proposals signal a significant step by the government to formalize Pakistan’s economy, reduce the informal sector’s share, and improve revenue collection, aligning with the broader goals of fiscal discipline under the International Monetary Fund (IMF) program.
