Pakistan expands digital monitoring to retailers in major tax crackdown
New rule brings thousands of retailers into the digital tax net, requiring integration of sales systems with FBR’s network as part of efforts to document trade and boost revenue
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
The Federal Board of Revenue (FBR) has announced a sweeping new rule that will bring thousands of retailers under digital monitoring. The move aims to track every step of the supply chain—from importers and manufacturers to wholesalers and shopkeepers—as part of a national push to document trade and boost revenue.
The new regulation, issued under SRO 2071(I)/2025 on Nov. 3, amends Rule 150Q of the Sales Tax Rules, 2006. It expands the FBR’s digital monitoring system to include retailers who have large tax deductions under specific income tax laws.
Who will be covered
Under the new rule, any retailer whose withholding tax—a tax collected at the time of business transactions—exceeds PKR 100,000 under Section 236G or PKR 500,000 under Section 236H of the Income Tax Ordinance, 2001, must now integrate their sales systems with the FBR’s digital network.
Section 236G applies to taxes collected when manufacturers or importers sell goods to distributors.
Section 236H applies to taxes collected when distributors or wholesalers sell goods to retailers.
Together, these laws help the government track business-to-business transactions and ensure taxes are collected properly at each stage of the supply chain.
Why the crackdown
Tax experts said the decision was driven by a sharp rise in withholding tax collection during the 2024-25 fiscal year. Taxes collected under Section 236G rose 148% to PKR 25.35 billion, while those under Section 236H jumped 119% to PKR 37.7 billion from the previous year.
“The surge shows that there’s still a large undocumented portion of the retail market,” said tax expert. “This system will help us close that gap and make the process more transparent.”
What it means for retailers
Retailers who fall under the new thresholds will now be required to link their sales and purchase systems directly to FBR’s online monitoring platform. The goal is to create a digital sales trail, making it harder to hide income or underreport sales.
Officials said this is part of the FBR’s ongoing digital transformation program, which seeks to modernize Pakistan’s tax system and reduce human involvement in monitoring and enforcement.
With this latest move, the FBR has made it clear that retailers are now officially they have been on Tracking system, and the era of undocumented sales is coming to an end.
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