KARACHI – Large cash deposits to trigger higher tax liability for retailers as the Federal Board of Revenue (FBR) revised rules.
The country’s apex tax collection made stern rules to promote transparency in financial transactions as the country moves toward digitized economy. Federal Board of Revenue (FBR) announced that retailers will no longer get tax relief on cash deposits exceeding Rs2Lac. The crackdown also targets online sellers, signaling a major shift in Pakistan’s financial landscape.
Under new rules, any payment above Rs 200,000 must go through crossed cheques or online banking. Those caught depositing excess cash risk a harsh penalty; 50pc of the extra amount will be slashed from declared production costs, drastically hiking tax bills.
FBR introduced move is aimed at curbing rampant tax evasion and pushing country toward fully digitized economy. Critics warn that the crackdown could shake up the retail sector, while government claims it’s a bold step to make Pakistan’s financial dealings more transparent and internationally compliant.
On the other hand, authorities announced key relief measures for Pakistan’s business community, confirming that direct cash deposits into a seller’s bank account will now be considered valid payments under the Income Tax Ordinance, 2001.
This move comes after concerns over a recent rule that threatened to disallow 50pc of business expenses for payments of Rs 200,000 or more made outside formal banking or digital channels. FBR clarified that cash deposits made directly into a bank account will not attract penalties, easing the burden on traders, retailers, and SMEs that rely on cash transactions.
In separate announcement, FBR said that arrests in sales tax cases will now be limited to serious offenders involved in fake invoices, with action only taken against those who destroy evidence, evade authorities, or ignore official notices. A new Sales Tax General Order (STGO) will soon outline clear arrest procedures to ensure fair enforcement.
Pakistan cuts Income Tax from 5% to 1% for Salaried Class earning up to Rs12lac a year
