More tax generation: CAP seeks adoption of digital payments in retail sector

LAHORE: The Chainstore Association of Pakistan (CAP) has called on authorities to prioritize the adoption of digital payments in the retail sector to improve tax generation and documentation.

In a press release issued on Monday, CAP Chairman Rana Tariq Mehboob and Co-founder Asfandyar Farrukh expressed concern over the slow progress in documenting retail trade due to stagnation in FBR-POS integration and the 'Tajir Dost' drive.

The CAP representatives highlighted the benefits of digital payments, including enhanced transparency, reduced cash handling costs and risks, and simplified tax compliance. They emphasized the need for a comprehensive policy framework to promote digital payments across all sectors, especially retail, through tax incentives and associated measures.

Farrukh proposed slashing GST to 5% for all retail transactions made through digital payment methods to encourage faster adoption among businesses and consumers.

Mehboob added that speedy adoption of digital payments at a lower tax rate will aid in documenting business turnovers, leading to improved sales tax generation and enhanced income tax collection over time.

CAP urged policymakers to take quick and decisive action through a collaborative approach with key players in the ecosystem, accelerating the adoption of technology, streamlining tax procedures, and enacting policies that fast-track digital payment solutions.

Copyright Business Recorder, 2024