The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called for coordinated tax incentives and policy measures to accelerate the adoption of digital payments in Pakistan, with business and government stakeholders highlighting digital transactions as an important tool for improving transparency, documenting economic activity and expanding the tax base.
The proposal was discussed during an interactive roundtable held at Federation House in Karachi on Tuesday. The meeting brought together representatives from the State Bank of Pakistan, Federal Board of Revenue, Sindh Revenue Board and the private sector to discuss measures that could support Pakistan’s transition towards a cashless economy.
FPCCI President Atif Ikram Sheikh said the discussion focused on developing a coordinated framework of incentives that could encourage businesses and consumers to use digital payment methods more frequently. Potential measures discussed during the session included tax relief, cashback schemes and discounts linked to digital transactions.
Sheikh said such incentives could encourage more transactions to move into documented channels, strengthen tax compliance and support the expansion of Pakistan’s formal economy. He stressed that the shift towards a cashless economy had become an urgent economic requirement, as reducing dependence on cash could improve transparency and lower costs for businesses.
He also said greater use of digital payments could strengthen Pakistan’s integration with international markets. According to the FPCCI president, the transition would require coordination between government institutions, regulators and businesses so that digital payment adoption is supported through practical measures rather than relying solely on regulatory requirements.
Ghulam Muhammad Phul, Head of the Financial Inclusion Support Department at the State Bank of Pakistan, reiterated the central bank’s commitment to facilitating the development of secure and resilient digital payments infrastructure. According to the discussion, strengthening the underlying digital payment system remains important for supporting the wider transition away from cash-based transactions.
The Federal Board of Revenue also highlighted the role of digitalization in expanding Pakistan’s tax net. FBR Chief Commissioner, Regional Tax Office, Zafar Rafique said greater digitalization was essential for broadening the tax base. He added that the tax authority was examining possible incentives for digital transactions to encourage businesses to operate within the documented economy and improve compliance.
FBR Chief Commissioner, Inland Revenue, Hyderabad, Sajjad Akbar said government institutions attach significant importance to feedback and recommendations received from the business community. He indicated that input from businesses could help shape measures aimed at improving documentation and strengthening the tax system.
The Sindh Revenue Board highlighted an existing example of tax differentiation based on payment methods. Senior Member of the Sindh Revenue Board Abdul Hameed Memon said the Sindh government was already encouraging digital transactions in the restaurant sector by applying a lower sales tax rate to digitally paid transactions.
Under the measure cited during the roundtable, restaurants face an 8 percent sales tax rate on digital payments compared with 15 percent on cash transactions. The difference is intended to encourage customers and businesses to use digital payment channels while increasing the share of transactions that can be documented.
FPCCI Senior Vice President Saquib Fayyaz Magoon called for stronger cooperation between policymakers, regulators and businesses to close the gap between traditional business practices and emerging digital payment solutions. He said meaningful incentives would be important for encouraging businesses to adopt digital payment methods and making the transition more practical for the private sector.
Magoon also stressed that digitalization, documentation and taxation should be accompanied by facilitation. According to him, businesses need practical incentives and supportive policies to make digital payment adoption sustainable and help expand the tax base without placing additional pressure on compliant businesses.
Chairman of the Policy Advisory Board at FPCCI Mian Zahid Hussain also called for targeted tax relief for digital merchants and other practical incentives. He said such measures could accelerate the documentation of Pakistan’s economy while reducing pressure on sectors and businesses that are already operating within the documented tax system.
The discussions at Federation House underline the growing focus among Pakistan’s business community and public institutions on using digital payments as part of wider economic documentation efforts. The proposed combination of tax relief, cashback schemes, discounts and other incentives could provide businesses with additional reasons to shift transactions from cash to digital channels.
With the State Bank of Pakistan focusing on digital payment infrastructure, the Federal Board of Revenue examining incentives and the Sindh Revenue Board already using differentiated tax rates for digital restaurant payments, stakeholders are calling for a more coordinated approach. The FPCCI has maintained that aligning incentives with digital payment adoption could help Pakistan increase documented transactions, strengthen tax compliance and expand the formal economy.
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