Karachi Tax Bar Association urges expansion of documentation rules across all trade levels to widen tax base and improve transparency.
The Karachi Tax Bar Association (KTBA) has proposed extending the requirement of collecting Computerized National Identity Card (CNIC) and National Tax Number (NTN) details throughout the entire supply chain, in a move aimed at broadening Pakistan’s tax base and improving documentation of economic activity.
In its recommendations for the federal budget 2026-27, the association said the obligation to obtain CNIC or NTN from unregistered buyers should apply at every stage of trade, rather than being limited to manufacturers and importers.
According to the KTBA, expanding the requirement across the supply chain would help ensure full documentation of commercial transactions and reduce the size of the undocumented economy, which remains a key concern for tax authorities.
The association further suggested introducing a threshold for registered persons, above which the requirement to obtain CNIC details from unregistered individuals would become mandatory.
Under Section 23 of the Sales Tax Act, registered manufacturers and importers are currently required to collect CNIC details of unregistered distributors when making taxable supplies. However, the rule has not been consistently applied to subsequent stages of the supply chain.
KTBA argued that limiting the requirement to manufacturers and importers has weakened its effectiveness, as downstream trade activity continues to operate outside the documented tax framework.
The association said extending CNIC and NTN obligations across all commercial transactions would strengthen tax compliance, improve transparency, and support efforts to expand the national tax net.
