As consultations between Pakistan and the International Monetary Fund (IMF) for the federal budget 2025–26 enter a critical phase, the Federal Board of Revenue (FBR) has categorically rejected proposals for a new tax amnesty scheme, reaffirming its commitment to IMF conditions.
Sources reveal that time is running short and competition is fierce as FBR and IMF officials continue exchanging tax-related proposals. The IMF has demanded strict enforcement of tax laws, while FBR is planning robust measures to increase revenue, curb evasion, and broaden the tax base.
A key proposal under consideration is to significantly increase fines on retailers and shopkeepers involved in tax evasion. According to FBR officials, from the next fiscal year, registered retailers using Point-of-Sale (POS) systems who evade taxes may face fines of up to Rs5 million -- up from the current Rs500,000.
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To encourage public participation, the government is also planning to reward citizens who report tax-evading retailers. A reward of Rs5,000 to Rs10,000 will be offered for identifying shops issuing fake receipts. There is also a proposal to engage university students for this purpose, who would stand outside shops to report such violations.
At present, around 39,000 retailers are registered under the POS system. The FBR aims to increase this number to 70,000 by the end of the next fiscal year. FBR officials also disclosed that approximately 20 retailers are being sealed daily for violating tax laws.
Meanwhile, during a meeting of the Senate Finance Committee, members including Faisal Vawda and Farooq H. Naek suggested offering a new tax amnesty to allow black money into the formal economy. They proposed even extending this amnesty to public officeholders.
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However, FBR officials rejected the idea, stating that offering amnesty is not possible under the IMF program. They added that Pakistan, having exited the Financial Action Task Force (FATF) grey list with difficulty, cannot afford another such risk. "Amnesty has been granted continuously from 2018 to 2020," the officials said.
The FBR also plans to enhance monitoring across various economic sectors. Proposals are being finalized to install monitoring cameras and deploy field officers in retail outlets. Specific focus will be placed on sectors like poultry, green leaf tobacco, chicken, and beverages, where tax leakage has remained a concern.
The officials told the committee that 34.5% additional tax had been collected by monitoring sugar mills' production during the current fiscal year. They further added that the monitoring of 26 cement factories in the country will be completed by June 2025.
In addition, proposals are under review to abolish tax refunds on local supplies, aiming to tighten the refund mechanism and prevent misuse.
