Islamabad, May 21, 2025 – In a bold move to tackle tax evasion, the federal government has announced plans to significantly increase fines for shopkeepers and businesses in the upcoming budget, sources familiar with the matter revealed. The decision was discussed during a recent session of the Senate Standing Committee on Finance, where Federal Board of Revenue (FBR) officials outlined a comprehensive strategy to strengthen tax compliance across the retail sector.
The proposed measures include raising the penalty for tax evasion from Rs0.5 million to a hefty Rs5 million, targeting retailers who fail to comply with tax regulations. The FBR aims to bring an estimated seven million retailers into the tax net by enhancing point-of-sale registration systems. To further deter fraudulent practices, authorities are introducing a reward program offering up to Rs10,000 to individuals who report fake receipts used to dodge taxes.
To ensure stricter enforcement, the government plans to install surveillance cameras and deploy additional personnel at retail outlets. The initiative will focus on key industries, including poultry, tobacco, beverages, and sugar production, where improved monitoring has already shown promising results in boosting tax revenue.
During the committee meeting, concerns were raised about delays in processing sales tax refunds, particularly for exporters in sectors like textiles, leather, and surgical goods. FBR officials assured the committee that steps are being taken to streamline refund procedures to support export-driven industries.
The crackdown on tax evasion will also involve daily inspections and business closures in major cities such as Lahore, Karachi, and Islamabad. The FBR plans to expand these efforts nationwide, with harsher penalties set to take effect from July 2025, pending parliamentary approval. Authorities noted that the current low fines have hindered enforcement, prompting the need for stricter measures.
In a unique approach, the government is planning a nationwide awareness campaign to educate the public about the dangers of tax evasion. As part of this initiative, university students will be enlisted to monitor shops and report non-compliance, fostering a culture of accountability.
