The federal government has decided to curb the cash-based economy and expand economic documentation under pressure from the International Monetary Fund (IMF). Following the failure of the trader-friendly scheme, strict tax collection targets have now been set for the retail sector.
According to sources, the government has fixed a tax collection target of Rs517 billion from large traders by March 2026. The Federal Board of Revenue (FBR) has decided to take strict measures to bring retailers into the tax net. Under the plan, Rs707 billion in income tax will be collected from major retailers by June 2026, while penalties and legal action will be taken against non-filers.
To enhance sales tax collection, digital receipts and Point of Sale (POS) systems are planned to be made mandatory. Retailers with an annual turnover of Rs500 million will be required to implement a digital invoicing system by June 2026.
The IMF has also imposed a condition to limit pending tax refunds. Officials stated that POS systems have already been installed at 38 percent of large retail outlets, while the target is to cover 40,000 major retailers with POS systems over the next two years.
Sources further revealed that authorities are considering tracking retailers through bank accounts and utility bills. A proposal is also under consideration to disconnect electricity and gas connections of shopkeepers who fail to pay taxes.
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