LAHORE: The Chainstore Association of Pakistan (CAP), representing organized Tier-1 retail brands operating across malls, high streets and standalone outlets nationwide, wishes to place on record its considered response to recent reports in media regarding the status of Point of Sale (POS) connectivity.
CAP fully supports the digitization and documentation drive initiated under the Finance Act 2019 and implemented by the Federal Board of Revenue (FBR), and remains committed to strengthening transparency and tax compliance in Pakistan, despite prevailing challenges.
However, the portrayal that over 80-90 percent of Tier-1 branches are “disconnected” requires careful contextual examination. The lists available on the FBR website appear to be auto-generated around 8:00 AM, when the overwhelming majority of physical retail outlets are closed and their POS systems are naturally offline, apart from their e-commerce stores. This creates a distorted snapshot of connectivity status. Systems linked to online operations may remain active, while brick-and-mortar outlets legitimately reflect inactivity due to business hours. Measuring compliance without accounting for operational timing can lead to inflated and misleading conclusions.
More importantly, the financial data itself contradicts the perception of systemic disconnection. Reportedly, the FBR has collected Rs1.55 billion million in POS service fees since August 2021, in addition to hundreds of billions of rupees in sales tax and income tax from compliant retailers, with substantial increases every year. Such sustained and increasing POS-linked fee and tax collection is only possible when systems are integrated and operational. If large-scale or persistent disconnection were truly occurring, these collections would not continue to rise. The revenue trend itself is clear evidence that organized Tier-1 retail remains functionally connected.
CAP also notes that in various instances, temporary disconnections have stemmed from technical or system-side factors rather than deliberate non-compliance by retailers. This position was reinforced in a decision of the Federal Tax Ombudsman Secretariat in Case No6431/ISB/ST/2025 dated 18-06-2025, where technical considerations were acknowledged. Such findings underline the need to differentiate between operational downtime, system latency, and genuine compliance violations.
The earlier POS incentive initiative had also demonstrated that consumer engagement can significantly improve documentation behaviour. Its discontinuation over the past two years has slowed that momentum. Incentive-based compliance mechanisms, combined with technical facilitation, can produce far stronger results than perception-driven narratives.
Tariq Mehboob, Patron-in-Chief of CAP, stated that organized retail is one of the most documented and transparent sectors of the economy and has invested heavily in POS infrastructure across Pakistan. He emphasized that compliance evaluation must be data-driven, time-sensitive, and technically accurate to avoid undermining compliant businesses.
Asfandyar Farrukh, Chairman CAP, added that CAP remains ready to work jointly with the FBR through a structured technical review mechanism to refine reporting methodology, resolve connectivity issues and expand the tax base in a forward-looking manner.
CAP reiterates that organized retail is not the problem — it is a partner in Pakistan’s documentation journey. A collaborative approach, improved reporting methodology, and stakeholder consultation will ensure that the national digitization agenda is strengthened rather than clouded by misinterpreted data snapshots.
Copyright Business Recorder, 2026
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