ISLAMABAD: In a major move to curb tax evasion, the Federal Board of Revenue (FBR) is set to propose significantly heavier penalties on non-compliant retailers in the upcoming federal budget for 2025-26.
During a recent meeting of the Senate Standing Committee on Finance, FBR officials revealed a plan to raise the existing fine for tax-evading retailers from Rs0.5 million to a maximum of Rs5 million.
The FBR’s proposal is part of a broader strategy to enhance tax compliance among the retail sector, which remains largely undocumented. Targeting nearly seven million retailers nationwide, the initiative seeks to improve registration at Points of Sale (POS) and crack down on underreporting of sales. The FBR emphasized that this tougher stance on tax evasion is essential to plugging revenue leakages and ensuring fair taxation.
Whistleblower reward scheme introduced
To encourage public participation, the FBR is introducing a reward scheme aimed at individuals who report fake receipts issued by retailers to dodge taxes. Under the proposed plan, informants will be eligible to receive cash rewards of up to Rs10,000. This move is expected to foster greater transparency and create deterrence against the issuance of bogus invoices.
The FBR also outlined measures to strengthen field monitoring, including the installation of surveillance cameras and deployment of additional staff at key retail locations. These steps are part of an aggressive enforcement campaign that has already seen daily closures of non-compliant businesses in major cities like Karachi, Lahore, and Islamabad. Retailers in high-risk sectors such as poultry, beverages, tobacco, and sugar mills are likely to face closer scrutiny, given their history of tax avoidance.
Addressing refund delays & public awareness
At the same time, the FBR acknowledged concerns raised by Senate Finance Committee Chairman Saleem Mandviwala over delayed tax refunds. Officials assured that refunds in key export sectors—textiles, sports goods, leather, and surgical equipment—will now be expedited. A national media campaign, possibly involving university students to assist in oversight, is expected to be launched soon to raise awareness against fake receipts. If approved by Parliament, the new penalties on retailers will come into effect from July 2025, strengthening FBR’s enforcement toolkit against tax
