ISLAMABAD — July 24, 2025: The International Monetary Fund (IMF) has placed a major new condition on the Pakistani government, demanding the registration of at least 50,000 traders before allowing any rollback of the recently imposed 4% additional sales tax on supplies to unregistered entities.
This condition emerged during a session of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwala, where senior officials from the Federal Board of Revenue (FBR) and Ministry of Finance addressed concerns from the business community and lawmakers.
Tax Compliance in the Spotlight
FBR Member Dr. Hamid Ateeq Sarwar disclosed that of the 200,000 registered sales tax filers, only about 60,000 actually pay taxes—including just 30,000 manufacturers. He pointed out that sales tax compliance remains abysmally low within Pakistan’s vast trading sector, despite over 380,000 industrial and 5 million commercial electricity connections, highlighting widespread underreporting.
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To enforce tax compliance, the FBR plans to implement daily digital invoice reporting, and require that sales over Rs200,000 be conducted through banking channels. Dr. Sarwar emphasized that any tax relief, particularly on the additional 4% sales tax, is conditional on widespread trader registration with the FBR. He called on business organizations to cooperate rather than resist the process.