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- The prime minister directs the FBR to treat taxpayers with respect as tax-to-GDP ratio climbs to 11.3 percent
- Officials say Track and Trace system in place for sugar, tobacco and fertilizer sectors, will be expanded
ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday directed the Federal Board of Revenue (FBR) to expand its Point of Sale (POS) system across the retail sector in an effort to plug revenue leakages and document more of the cash-driven economy.
Pakistan has undertaken a series of tax reforms in recent years under successive International Monetary Fund (IMF) loan programs, focusing on digitization and expansion of the taxpayer base to improve revenue collection and reduce reliance on external financing.
The POS system is part of this broader effort, aiming to improve compliance and transparency in a country where large segments of the retail economy operate informally, often escaping documentation and taxation.
The POS system, which digitally links cash registers at retail outlets with the FBR’s central database, allows real-time monitoring of sales and automated calculation of sales tax, reducing underreporting and tax evasion.
“The FBR must widen the scope of its Point of Sale system in retail,” Sharif said at a review meeting on tax reforms. “The production processes of all industries, including tax defaulters, should be digitized to bring them into the tax net.”
During the meeting, Sharif praised the FBR and the finance ministry for a 42 percent increase in federal tax revenues in the last fiscal year, saying it was the highest in a decade.
Officials briefed the prime minister that Rs865 billion ($3.03 billion) in additional revenue had been collected during the previous fiscal year, owing to stronger enforcement and digitization. The tax-to-GDP ratio also rose to 11.3 percent, up 1.5 percentage points from FY24.
Addressing the participants of the meeting, Sharif emphasized the need for respectful treatment of taxpayers.
“The FBR must treat the public with respect and dignity while fulfilling its duties,” he said. “No negligence in achieving economic targets will be tolerated for the sake of Pakistan’s bright economic future.”
Sharif instructed the FBR to extend the Track and Trace Digital Production System to monitor goods from production to delivery.
Officials informed him that the system has already been implemented in the sugar, tobacco and fertilizer sectors, and will soon cover cement and other industries.
“All institutions must work with full dedication to meet the new fiscal year’s targets. Any complacency will not be tolerated,” the prime minister warned, adding that he is personally monitoring all revenue-related progress.