Karachi, May 31, 2025 – The Federal Board of Revenue (FBR) is considering to implement mandatory NTN registration for Pakistan’s informal economic sectors as in the budget for fiscal year 2025–26.
The objective is to bring high-volume cash-driven businesses under the formal tax net and expand the documented economy.
According to FBR officials, several stakeholders have proposed that informal sector businesses—particularly bulk suppliers of vegetables, fresh chicken, mutton, and fish—be required to obtain a National Tax Number (NTN) and comply with standard tax regulations. These sectors, though unregulated, represent a significant portion of daily cash transactions and economic turnover.
The proposal suggests that integration of these sectors into the tax system should include five key measures:
1. Mandatory NTN registration for all bulk suppliers in informal sectors.
2. Compulsory filing of income tax returns under Section 114 of the Income Tax Ordinance, 2001.
3. Inclusion in the withholding tax framework as per Section 153, where applicable.
4. Deployment of Point-of-Sale (POS) systems and digital invoicing for transparency.
5. Monitoring of payments through electronic systems to ensure traceability and compliance.
FBR sources note that enforcing NTN registration in such sectors would significantly broaden the tax base without overburdening already registered and compliant taxpayers. Capturing even a fraction of the informal sector’s revenue can result in a substantial increase in tax collections.
Encouragingly, the growing adoption of digital payment solutions, invoicing software, and POS infrastructure provides the FBR with a viable mechanism for implementing and monitoring NTN registration and compliance among informal suppliers. By leveraging technology, the transition to formal economic participation can be streamlined, reducing friction for businesses while improving revenue transparency.
Experts believe that integrating informal markets into the national tax system through NTN registration and digital oversight not only ensures equitable revenue collection but also promotes a culture of compliance and accountability. This reform-oriented approach could support sustainable public finance and reduce the need for repeated tax hikes on formal sector participants.
If accepted in the upcoming budget, this recommendation may mark a critical shift in how Pakistan regulates and monitors informal commerce—transforming it from a shadow economy into a documented, growth-oriented segment.