ISLAMABAD
\nThe country\u2019s organized retail sector on Saturday expressed grave concern over the deteriorating environment for tax-compliant retailers due to aggressive revenue enforcement and persistent failures in the FBR-POS integration system.
\nThe Chainstore Association of Pakistan represents a large portion of Pakistan\u2019s retail and wholesale trade, the organized retail sector directly employs over one million people and supports a wide ecosystem\u2014including shopping malls, manufacturers, service providers, and the cottage industry. Retail brands are also a growing contributor to export earnings through physical stores abroad and cross-border e-commerce.
\nDespite being early adopters of the FBR-POS system and generating 25\u201330% of their turnover in taxes, compliant Tier-1 retailers are now facing a perfect storm of high tax rates, increasingly complex procedures, punitive enforcement, and unresolved system issues.
\nThis year alone, several regulatory instruments\u2014including SRO 69(I)\/2025, SRO 55(I)\/2025 and the Tax Laws (Amendment) Ordinance 2025\u2014have exacerbated compliance burdens without addressing critical FBR-POS system deficiencies.
\nThese include issues such as (1) POS profile expiry disconnections, rendering invoices unverifiable; (2) Incorrect POS status flags showing \u201cdisconnected\u201d despite active syncing; and (3) Weak support capacity of Pakistan Revenue Automation Limited (PRAL) to address technical challenges.
\nCompounding these technical issues is an increasingly punitive enforcement approach. Several compliant outlets experiencing system errors have been sealed without prior notice, and many retailers report being pressured to pay penalties exceeding Rs. 500,000 per outlet to reopen, apparently to increase short-term tax collections. Such measures erode business confidence, damage reputations, and undermine long-term documentation efforts.
\n\u201cWe fully support strict action against wilful tax evasion, but the current approach is causing heavy collateral damage,\u201d said Asfandyar Farrukh, Chairperson of CAP. \u201cLaw-abiding retailers are being penalised for compliance, while vast sections of the informal market remain untouched. This is not reform\u2014it is a rollback in the making.\u201d
\nThe reversal of key incentives has further compounded the crisis. The discontinuation of the 10\u201315% concessional GST rate for customers of integrated retailers has rendered many businesses uncompetitive vs. the untaxed and undertaxed majority, leading to network consolidation and closures. In recent years, this reform vacuum has stalled employment growth, investment, and even export potential.
\nCAP also calls for formal inclusion in policymaking processes to ensure that ongoing and future reforms are informed by on-ground realities.
\n\u201cCompliant retailers who invested in technology and compliance should be recognized as partners in reform. CAP and its members wholeheartedly support broadening of the retail tax base – but it must be fair, functional, and future-focused,\u201d said Tariq Mehboob Rana, CAP Patron-in-Chief. \u201cUnless the current issues are urgently addressed, years of progress towards the growth of the documented sector risk being reversed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
ISLAMABAD The country\u2019s organized retail sector on Saturday expressed grave concern over the deteriorating environment for tax-compliant retailers due to aggressive revenue enforcement and persistent failures in the FBR-POS integration system. The Chainstore Association of Pakistan represents a large portion of Pakistan\u2019s retail and wholesale trade, the organized retail sector directly employs over one million […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-479226","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n