Pakistan targets credit card spenders in crackdown on non-filers

Pakistan’s tax collection authority—the Federal Board of Revenue—has launched a crackdown on non-filers who are making large transactions through credit cards, officials said, as part of efforts to broaden the tax base and increase revenue collection.

According to sources, the FBR has identified over 200,000 individuals who are regularly conducting significant monthly transactions using credit cards but have not filed their income tax returns.

The FBR is now obtaining detailed credit card transaction records to assess the actual income of these individuals. Commercial banks are cooperating by providing credit card usage data to the tax authority, officials said.

As part of stricter enforcement measures, the FBR has made it mandatory for taxpayers to disclose all purchases made via credit cards in their annual tax returns. This move is aimed at matching declared income with actual spending patterns to detect discrepancies and possible tax evasion.

The tax authority has issued a firm deadline of October 15 for filing income tax returns, warning that no further extensions will be granted this year.

To enforce compliance, the FBR has begun sending SMS alerts and issuing formal notices to suspected non-filers. Officials said notices will be served to individuals who make high-value credit card purchases but fail to submit returns.

Widening the tax net

Pakistan has long struggled with a narrow tax base, with only a small fraction of its over 240 million population filing tax returns.

The country is under pressure to boost domestic revenue as part of ongoing economic reforms agreed with the International Monetary Fund (IMF), especially after securing multiple bailout packages in recent years.

Efforts to digitize tax records, link financial data with tax filings, and penalize habitual non-filers have intensified in the past year. The use of credit card data is seen as a key step in aligning actual consumer spending with reported income.

The FBR’s renewed push comes amid growing concerns over revenue shortfalls and the need to fund public services and development projects without further burdening existing taxpayers.

The FBR fell short of its revenue collection target by PKR 199 billion in the first quarter (July-September) of the current fiscal year, mainly due to lower domestic sales tax receipts and reduced revenue from utility bills.

According to provisional figures released, the FBR collected PKR 2.884 trillion in the first quarter against a target of PKR 3.083 trillion. However, the collection marked a 13% increase from PKR 2.558 trillion collected during the same period last year.

The shortfall was most pronounced in September, when revenue collection reached PKR 1.228 trillion—PKR 155 billion below the target of PKR 1.384 trillion. Despite this, the September figure represented an 11% increase from PKR 1.105 trillion collected in September FY25.