FBR Finalizes Phased Plan to Bring 6,000 Unregistered Retailers Into Tax Net by June
Pakistan's tax authority has completed physical mapping of 6,000 unregistered shops and small retailers, with utility disconnections reserved as a last-resort penalty for persistent non-compliance.
The Federal Board of Revenue (FBR) has finalized a phased enforcement strategy aimed at bringing unregistered retailers and small shopkeepers into the formal tax system, with an initial group of 6,000 businesses identified for the first round of action. Under the plan, which is set to be submitted to the government for approval, persistent defaulters could eventually face disconnection of both gas and electricity supplies as a final measure, according to sources familiar with the matter.
The FBR has completed physical mapping of 6,000 retailers operating in newly developed markets and locations across the country. These businesses will form the first target group of the enforcement campaign. The authority also holds CNIC and utility records for roughly 1.4 million shopkeepers out of an estimated 3.7 million potential retailers nationwide, and these will be pursued in subsequent phases of the drive.
Officials intend to use the available identification and utility data to track down retailers who remain outside the registration system, with the goal of completing registrations by June next year. The enforcement measures would escalate over time: penalties are proposed at Rs. 10,000 in the first month, rising to Rs. 25,000 in the second month and Rs. 50,000 in the third. Authorities may also seal shops belonging to businesses that continue to stay outside the tax net.
The registration initiative has so far drawn a disappointing response. Only 220 new shopkeepers have joined the scheme despite the identification of approximately 3.6 million potential non-filers in the retail sector. In total, just 1,750 retailers have registered under the program, and most of those were already part of the tax system before the scheme was introduced.
The program was designed to generate Rs. 50 billion in revenue, and the limited uptake has raised questions about the government's ability to meet that target. The figure represents the scheme's projected revenue goal rather than actual collections, and the total amount recovered so far has not been disclosed. The FBR's phased enforcement model will determine how quickly the broader base of unregistered retailers is absorbed into the formal economy.
