ISLAMABAD: The Federal Board of Revenue (FBR) has taken a significant step toward digitalizing Pakistan’s economy by making debit and credit card payments mandatory for businesses, moving away from cash transactions. This initiative is part of Pakistan’s commitments to the International Monetary Fund (IMF) and aims to increase transparency and enhance revenue collection.
In the first phase, tier-one retailers and large businesses are required to install point-of-sale (POS) machines connected to the FBR’s computerized system. Additionally, the government has introduced CCTV surveillance to monitor business transactions and ensure compliance.
Economists have largely welcomed the transition toward digital payments. Dr. Khaqan Najeeb, an economic expert, noted that the move aligns Pakistan with global financial trends, where digital payments are rapidly becoming the standard.
However, Dr. Sajid Amin emphasized that smooth implementation is crucial. He cautioned that if this initiative is perceived as a purely tax-centric move, it may face resistance from businesses. “If documentation is introduced merely to expand the tax net, it will naturally face pushback,” he added.
Taxation specialist Dr. Ikram-ul-Haq pointed out the need for the government to digitize its own departments first. “If the government itself processes salaries using outdated methods, how can it expect businesses to fully embrace digitization?” he questioned.
Concerns about financial inclusion, particularly in rural areas, were highlighted by Dr. Khalid Walid, who noted that debit and credit card penetration in Pakistan remains low. “Microfinance banks are well-integrated, and the FBR can collaborate with them to improve financial access,” he suggested.
Under the new regulation, all businesses will be linked to the FBR’s centralized system, which will compile daily, weekly, and monthly transaction data. Electronic invoices will be stored for six years, and any attempt to manipulate records will result in legal action against the violators.
As Pakistan transitions toward digitalization, its success will depend on the effective implementation of the policy and the government’s ability to address concerns raised by experts and businesses. Ensuring financial inclusion and upgrading government systems will be critical for achieving the desired results.