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The Federal Board of Revenue (FBR) has significantly expanded its digital tax enforcement network, bringing over 40,000 large retail outlets under the Point-of-Sale (POS) system across Pakistan. This marks nearly 38% coverage of Tier-1 retailers, representing a major milestone in the country’s economic documentation drive.
Pakistan’s retail sector has long been a challenge for tax compliance, with limited documentation and weak enforcement. The FBR’s POS integration is part of a broader effort to digitize transactions, minimize tax evasion, and enhance transparency a move that has already started to reflect in key fiscal indicators.
According to FBR data, Pakistan’s tax-to-GDP ratio improved to 10.3% in FY 2024-25, up from 8.8% the previous year, marking the highest level in several years. The increase is attributed to stronger direct tax performance (5.1% of GDP) and sales tax contributions (3.4% of GDP).
FBR’s digital and legal reforms have also yielded tangible results:
- Rs. 255 billion recovered through dispute settlements.
- Rs. 218 billion collected in admitted tax liabilities, compared to Rs. 160 billion a year earlier.
- Rs. 25 billion recovered from the sugar sector via real-time production monitoring.
- Rs. 12.8 billion recovered from the cement sector through digital oversight.
An FBR spokesperson noted,
“Our strategy is focused on broadening the tax base and closing loopholes through technology-driven enforcement. The momentum achieved this year will guide stronger compliance initiatives in the next fiscal cycle.”
The department plans to further expand its POS coverage and digital audit systems, aiming to sustain growth in tax revenue and transparency across sectors.
In a related trend, petroleum products remained the top contributor to customs duty collection, adding Rs. 291 billion this year. Economists view FBR’s digital enforcement as a cornerstone for sustainable fiscal reform and a step toward formalizing Pakistan’s large informal economy.
