The Federal Board of Revenue (FBR) installed point-of-sale (POS) systems at 40,000 retail outlets during FY2024-25, covering 38 percent of Tier-1 retailers, as part of its drive to enhance tax compliance and transparency in the retail sector.
According to an FBR report, the enforcement on retailers deepened considerably over the fiscal year, bringing a wider segment of large outlets into the digital monitoring network. The move forms part of the government’s broader fiscal reforms aimed at expanding the tax base and formalising the retail economy.
The report noted that dispute resolution and legal settlements contributed Rs255 billion in revenue, while targeted compliance messages to taxpayers raised admitted tax liabilities to Rs218 billion in FY25, compared to Rs160 billion the previous year.
FBR data showed that Pakistan’s tax-to-GDP ratio climbed to 10.3 percent in FY25 from 8.8 percent in FY24 — the first time in five years that the ratio entered double digits. Officials attributed the increase to stronger enforcement, improved documentation, and higher direct tax collection, which accounted for 5.1 percent of GDP, followed by sales tax at 3.4 percent.
The report further highlighted that real-time production monitoring systems generated an additional Rs25 billion in the sugar sector between July and December 2024 and Rs12.8 billion from the cement sector over FY25.
Officials said that the expanding use of digital tools such as POS systems, data analytics, and automated monitoring has begun improving compliance trends, particularly among Tier-1 retailers, strengthening FBR’s enforcement capacity across the economy.
Slowly the government should remove withholding taxes from the system.