Retail Sector Tax Rises Rs455B in FY25

Islamabad, July 24, 2025, 09:53 PM PKT — The Prime Minister’s Office has revealed a major tax milestone, announcing a Rs455 billion surge in retail sector income tax for FY2024-25, pushing the total to Rs617 billion, with Rs316 billion from quarterly advance taxes on wholesalers, retailers, and traders, driven by point-of-sale system integration and stricter enforcement, per Wednesday’s statement. However, Federal Board of Revenue (FBR) sources flagged a vague retail sector definition, inadvertently swelling figures by including corporate firms, sparking debate.

At a review meeting chaired by Prime Minister Shehbaz Sharif, the focus was on tax system reforms, with the PM urging a digitized, facilitative framework, accelerated FBR digital transformation, and robust enforcement to curb the informal economy. Despite a record tax haul, the tax-to-GDP ratio fell short of the IMF’s 10.6% target, rising only 1.5% in FY25, though income tax filers jumped from 4.5 million in 2024 to over 7.2 million by June 2025. The FBR also touted a faceless customs clearance system, slashing clearance times from 52 to 12 hours within three months, boosting revenue and efficiency. The PM Office stressed a tax overhaul to balance revenue growth with relief for citizens, especially in the informal sector. Web context shows tax reform efforts, while posts found on X reflect mixed reactions—some praise progress, others question fairness. Critically, the narrative of “tax enhancement” may mask inclusion flaws—web data hints at past inconsistencies, and X sentiment suggests distrust in equitable enforcement, pointing to ongoing challenges.