ICAP proposes tax facilitation desks, data-sharing systems and national performance rankings for chambers to help widen Pakistan’s tax base and curb informality
The Institute of Chartered Accountants of Pakistan (ICAP) has proposed a major overhaul of Pakistan’s tax enforcement framework, suggesting that district chambers of commerce be turned into active partners in efforts to curb tax evasion and bring millions of traders into the formal economy.
The proposal comes as authorities intensify pressure to widen Pakistan’s narrow tax base and reduce reliance on indirect taxation. ICAP said the Federal Board of Revenue (FBR) cannot on its own monitor the country’s vast informal sector, which spans retail, wholesale and small-scale manufacturing.
If implemented, the recommendations would shift district chambers from traditional advocacy bodies into compliance-support institutions working alongside tax authorities.
Chambers as compliance facilitators
At the centre of the plan is the creation of Tax Facilitation Desks within district chambers across the country. These would be jointly staffed by officials from the FBR and provincial revenue authorities, including the Punjab Revenue Authority (PRA), Sindh Revenue Board (SRB), Khyber Pakhtunkhwa Revenue Authority (KPRA), Balochistan Revenue Authority (BRA) and Islamabad Capital Territory tax administration.
ICAP said the model would institutionalise cooperation between business associations and the state, helping formalise businesses rather than relying solely on enforcement raids and audits.
Peer pressure and data sharing
The proposal also calls for anonymised, district-level compliance data to be shared with chambers to highlight sectoral tax trends.
ICAP said such transparency could create peer pressure among traders, encouraging voluntary compliance by exposing gaps between sectors and regions without identifying individual taxpayers.
“This approach would promote self-regulation within business communities,” ICAP said in its recommendations, arguing that social and commercial accountability could complement state enforcement.
Performance targets and digital monitoring
Under the plan, chambers and tax authorities would set joint district-level compliance targets, including growth in registered taxpayers and increases in documented transactions.
ICAP also recommended a real-time digital dashboard to monitor progress, track compliance indicators and measure performance against agreed benchmarks.
National rankings and accountability
One of the more far-reaching proposals is a national ranking system to evaluate district chambers based on their contribution to tax compliance.
Metrics would include growth in taxpayer registration, expansion in documented transactions, audit performance improvements and overall revenue mobilisation support.
Annual rankings would be made public, introducing competition among chambers.
ICAP further suggested that chambers failing to perform or found to be overly influenced by political considerations could risk losing official recognition.
International models cited
To support its recommendations, ICAP cited examples from Turkey and Rwanda, where collaboration between business associations and tax authorities has been credited with improving compliance.
It pointed to Turkey’s Union of Chambers and Commodity Exchanges (TOBB) working with tax authorities, and Rwanda’s district-level revenue committees, which helped lift its tax-to-GDP ratio from around 12% to over 16%.
ICAP said such models demonstrate that structured engagement with the private sector can strengthen voluntary compliance and improve revenue collection outcomes.
Pakistan has long struggled to expand its tax base, with successive governments relying on frequent reforms and enforcement drives to capture untaxed economic activity.
