In a bid to enhance tax compliance and expand the usage of Point of Sale (POS) systems, the Federal Board of Revenue (FBR) is set to launch geo-tagged surveys in key cities, including Karachi, Lahore, and Islamabad. This initiative aims to identify businesses that are not fully integrated with the POS system or are underreporting their transactions.
The move comes as the International Monetary Fund (IMF) continues to exert pressure on the FBR to meet its Rs. 50 billion tax target. The IMF has urged the tax authority to take immediate enforcement actions, especially without waiting for the 2025-26 budget, which has further accelerated the urgency of these measures.
FBR officials disclosed that teams equipped with vehicles will conduct on-ground surveys in prominent shopping malls and commercial hubs across the three cities. These teams will be tasked with identifying retailers and wholesalers who either have not adopted the POS system or are using alternative methods to bypass transaction reporting. According to the FBR, it is estimated that between 50,000 and 100,000 shops across Pakistan still need to be incorporated into the POS network.
The geo-tagging system will enable the FBR to map businesses accurately and identify non-compliant entities more effectively. By using this technology, the tax authority aims to gather data on businesses’ locations and transaction patterns to ensure greater compliance. This system is expected to significantly reduce the margin for error and make enforcement more efficient in these high-traffic commercial areas.
In addition to the surveys, the FBR is developing a penalty system for any retailer who issues receipts outside the POS network. A similar penalty mechanism has already been implemented in restaurants and hotels in Islamabad, and the success of this model is likely to pave the way for its wider application. Retailers caught issuing manual receipts instead of POS receipts could face significant fines, which could incentivize more businesses to transition to digital systems.
The FBR has also been under pressure to meet its annual tax collection target, which was recently revised by the IMF. Pakistan’s tax collection target for the year was lowered from Rs. 12,970 billion to Rs. 12,332 billion, and as of the end of March 2025, the FBR had collected Rs. 8.43 trillion. This collection falls short of the revised target, leaving the FBR with little time to accelerate its efforts and meet the deadline of June 30, 2025.
In a recent statement, Finance Minister Muhammad Aurangzeb reported that tax payments declared by traders had reached Rs. 413 billion this fiscal year, a significant increase from Rs. 187 billion the previous year. However, much of this increase is attributed to adjustments rather than actual payments, highlighting a continued gap in revenue collection.
The planned geo-tagged surveys and enhanced enforcement of POS system compliance come at a critical juncture for the FBR, as it faces growing pressure to meet its revised targets. This initiative, if successful, could also pave the way for broader digitization of the retail sector in Pakistan, helping to improve tax transparency and compliance.
As the FBR continues to roll out its strategies, businesses are likely to face increased scrutiny, and compliance with POS system integration will become a crucial aspect of their operations. Retailers and wholesalers who have not yet adopted the system will need to adjust quickly or face potential penalties as part of the FBR’s intensified enforcement efforts.