Sohail Malik
A documented and digitized economy has become essential for Pakistan’s stability and growth.
A documented economy records transactions, incomes, jobs and business activity, while a digitized economy uses mobile apps, online portals, instant payment systems and electronic records to make those transactions efficient and transparent. In a country of 245 million people, only 5.2 million filed tax returns in 2024, over 60% of all transactions still take place in cash and less than 30% of adults have active digital accounts. The informal economy remains around 35% of GDP, with over 1.3 million retailers and thousands of SMEs operating outside the tax net. The consequences are visible everywhere: low tax revenue, weak documentation and a system that struggles to support its own development needs.
These gaps show up in everyday life. A grocery shop owner earning Rs. 500,000 a month may not issue receipts, maintain records or pay taxes simply because no easy system exists for him; yet with a POS machine, he could access loans and grow. In real estate, a property worth Rs. 2 crore is often registered at only Rs. 50 lakh, a problem highlighted by FBR audits, showing that nearly two-thirds of all property transactions are under-declared. Street vendors earning modest incomes remain undocumented and excluded from financial services, though pilot programs in Lahore and Peshawar demonstrated that providing QR codes and basic training can bring thousands of such workers into the formal economy.
The digitization gap affects freelancers and small service providers as well. A designer in Sa-hiwal earning over Rs. 100,000 from international clients may use unofficial channels to re-ceive payments because formal routes are complicated, keeping her income invisible to the system and limiting her access to credit. A truck operator running an entire transport business in cash loses out on subsidies, insurance and tax benefits that could come automatically through e-invoicing and digital payments. These examples illustrate a national reality: most economic actors are not unwilling to comply—they simply lack simple, accessible systems that make compliance worth their time.
Accelerating digitization requires making financial tools user-friendly, multilingual and widespread, while simplifying tax filing, promoting QR payments, expanding instant payment platforms like RAAST and linking subsidies and loans to documented economic activity. Affordable POS systems, digital education in schools and fully digitized land and property records would significantly reduce corruption and procedural delays. Other countries have shown how fast this transformation can happen. India’s UPI now handles more than 13 bil-lion transactions a month; Turkiye digitized 95% of land records and integrated its national ID across tax and business systems; Brazil’s Pix brought 140 million people into digital payments within three years and Rwanda digitized 90% of its government-to-person payments.
In Pakistan, responsibility rests with multiple stakeholders. The government must create simple registration portals, run awareness campaigns and provide incentives for taxpayers, especially since only 18% of registered businesses can currently file digital taxes independently. Banks and fintechs must design easy digital accounts and mobile apps in local languages, ad-dressing the needs of the 55 million unbanked adults. Citizens, too, have a role to play: asking for receipts, choosing digital payments and filing tax returns even when incomes are low.
The results of a fully documented and digitized economy would be transformative. Ordinary people would benefit from easier access to loans, quicker government services, direct digital transfers and fewer intermediaries. Prices would stabilize through transparent supply chains, corruption would decline as transactions become traceable and everyday paperwork would shrink as digital records link directly to CNICs. For the country, higher tax revenues, stronger institutions, better credit ratings, increased investment and rapid growth in digital exports—including freelancing and IT services—would mark a decisive shift away from debt dependency and toward sustainable, long-term economic strength.
Ultimately, a digitized and documented Pakistan means less fraud, less bureaucracy and more trust. Every digital payment strengthens the economy; every receipt asked for promotes fairness; every tax return filed contributes to national growth. Choosing digital systems is not just an economic decision—it is a step toward a more transparent, equitable and prosperous Pakistan.
—The writer is a senior Digital Banker with 26 years of experience in the Banking and Telecommunication industries.
