Karachi, May 2, 2025 – The Karachi Tax Bar Association (KTBA) has recommended that the Federal Board of Revenue (FBR) should make it mandatory for all unregistered individuals involved in the supply chain to provide their Computerized National Identity Card (CNIC) or National Tax Number (NTN).
In its recent budget proposals, KTBA pointed out issues with the current implementation of Section 23 of the Sales Tax Act, 1990, which deals with the documentation of business transactions. Currently, only manufacturers and importers are required to collect CNIC or NTN details from unregistered distributors. However, this requirement does not apply to the rest of the supply chain.
According to KTBA, limiting the CNIC condition to manufacturers and importers is not effective, as the rest of the supply chain remains undocumented. To truly improve transparency and tax compliance, the KTBA believes that the CNIC requirement should be applied to every stage of the supply chain, including wholesalers, distributors, and retailers.
To make the policy more practical, the KTBA has suggested setting a threshold limit for registered persons. Only transactions above that limit would require obtaining the CNIC from unregistered individuals. This approach would reduce the compliance burden on small businesses while still promoting documentation for larger transactions.
KTBA explained that without extending the CNIC or NTN requirement to the full supply chain, the government’s goal of documenting the economy cannot be achieved. Many transactions beyond the first level of the supply chain remain untracked, allowing tax evasion and reducing revenue collection.
The association believes that making CNIC mandatory across the board will encourage more people to register with the tax system, promote transparency, and improve overall tax enforcement.
By expanding the scope of CNIC usage in the supply chain, the FBR can take a strong step toward better documentation and improved tax compliance throughout Pakistan’s economy.