FBR system anomalies creating trouble for documented retailers

The Chainstore Association of Pakistan (CAP), the representative body of organized retail in Pakistan, on Saturday raised serious concerns regarding the persistent technical and enforcement challenges faced by FBR-POS Integrated Tier-1 Retailers.

CAP Chairman Asfandyar Farrukh has requested Mr. Rashid Mehmood Langrial, Chairman of the Federal Board of Revenue (FBR), seeking immediate intervention to resolve these critical issues that are disrupting retail operations and posing significant commercial risks.

Despite full compliance with the FBR-POS system, integrated retailers are encountering severe technical issues, including forced disconnections due to profile expiry, invoices failing to sync with the FBR portal, unexplained changes in POS system versions, and a lack of timely communication on system updates. Retailers are further burdened by manual reconciliation of invoices, the absence of bulk download options for POS data, and outdated technical documentation that has not been revised since 2019.

Additionally, CAP has highlighted excessive enforcement actions against compliant Tier-1 retailers. Despite compliance, Tier-1 Retailers are facing sudden ‘sealing’ of their businesses due to a single unverifiable invoice—many of which result from system failures rather than retailer negligence. Such heavy-handedness damages reputations, leads to financial losses, and negatively impacts tax revenue.

In addition, Tier-1 Retailers frequently receive notices or calls from field officers to deposit additional taxes before filing sales tax returns, even when due input tax adjustments are in place. Such demands must be rationalized to prevent undue pressure on compliant businesses. These actions not only damage retailer confidence but also discourage further adoption of the FBR-POS integration system, ultimately undermining documentation efforts.

The situation has been exacerbated by SRO 69(I)/2025, which has introduced additional compliance requirements that are impractical due to existing system limitations. Integrated retailers are now expected to verify every invoice despite the inefficiencies within the FBR-POS system, making it virtually unfeasible to comply with the new regulations.

“As the official voice of Pakistan’s organized retail sector, CAP remains committed to supporting the government’s efforts in enhancing tax compliance. However, technical failures and arbitrary enforcement measures are making it increasingly difficult for compliant retailers to operate smoothly. Integrated Tier-1 retailers already suffer from a lop-sided burden of GST, Income Tax, etc. which is rendering them uncompetitive. We seek the FBR’s urgent intervention to resolve all these issues and restore retailer confidence in the POS integration system,” said Asfandyar Farrukh, Chairman of CAP.

Patron in Chief CAP Rana Tariq Mehboob also urged the FBR to revise the Sales Tax Rules 2006 in consultation with the organized retail sector to ensure that compliance measures are both practical and effective. He also requested a meeting with FBR leadership to discuss these pressing concerns and find a workable solution that safeguards both business interests and tax documentation objectives including creating a level-playing field.

The Chainstore Association of Pakistan has reaffirmed its willingness to collaborate with the government in strengthening Pakistan’s retail ecosystem and ensuring a fair, transparent, and efficient tax compliance framework.