In a significant move towards digitalizing the economy, Pakistan’s Federal Board of Revenue (FBR) has made debit and credit card payments mandatory for businesses, moving away from traditional cash transactions. This initiative, part of Pakistan’s commitments to the International Monetary Fund (IMF), aims to improve revenue collection and promote transparency in business dealings.
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 monitoring measures, including CCTV surveillance of business transactions, to ensure compliance with the new policy.
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Economists have largely welcomed the shift towards digital payments. Economist Dr. Khaqan Najeeb highlighted that this transition aligns Pakistan with global financial practices, where digital transactions are becoming more common. He believes this will enhance revenue collection and create a more documented economy.
However, economist Dr. Sajid Amin cautioned that the government must focus on smooth implementation and avoid giving the impression that the initiative is solely driven by taxation goals. “If the perception is that the sole purpose is to widen the tax net, resistance will likely follow,” he warned, stressing the need for a balanced approach.
Experts have also raised concerns about the feasibility of a nationwide rollout. Taxation specialist Dr. Ikram-ul-Haq suggested that the government should first focus on digitizing its own systems before mandating businesses to do the same. “The government still processes salaries using outdated methods—how can it expect businesses to adopt full digitization?” he questioned.
Furthermore, economic expert Dr. Khalid Walid pointed out challenges related to financial inclusion, especially in rural areas where debit and credit card penetration remains low. He recommended that the FBR leverage the infrastructure of microfinance banks to ensure broader financial access.
The new law requires all businesses to be linked to the FBR’s system, providing daily, weekly, and monthly transaction data. Invoices will be stored electronically for six years, and attempts to manipulate records will face legal consequences.
As Pakistan moves forward with this digitalization effort, its success will depend on the careful implementation of the policy and addressing concerns raised by experts and businesses to ensure widespread compliance and acceptance.
