Pakistan Sets Strict Tax Collection Targets to Curb Cash Economy Under IMF Pressure

**Islamabad:** The federal government has decided to reduce the cash economy and increase documentation under pressure from the International Monetary Fund (IMF), setting stringent tax collection targets for the retail sector after the failure of the trader-friendly scheme.

According to sources, the government has set a target of collecting PKR 517 billion in taxes from major traders by March 2026, in response to IMF demands to curb cash transactions and enhance record-keeping in the retail sector.

The Federal Board of Revenue (FBR) has decided to take strict measures to bring retailers into the tax net. Income tax collection from major retailers is expected to reach PKR 707 billion by June 2026, with fines and legal action planned against non-filer retailers.

To boost sales tax collection, the FBR has mandated the implementation of digital receipts and point-of-sale (POS) systems. Retailers with an annual turnover of PKR 500 million will be required to adopt digital invoicing systems by June 2026.

The IMF has also stipulated limiting pending tax refunds. Currently, 38% of major retailers have POS systems installed, with a plan to equip all 40,000 major retailers over the next two years. Retailers will also be tracked through bank accounts and utility bills to ensure compliance.

This initiative aims to increase transparency, curb tax evasion, and formalize the retail sector’s financial activities across Pakistan.