LAHORE: The Chainstore Association of Pakistan (CAP) has called on authorities to undertake a contextual and technically grounded review of Tier-1 Point of Sale (POS) connectivity data, arguing that current interpretations risk misrepresenting the organised retail sector’s compliance record.
CAP Patron-in-Chief Tariq Mehboob said on Saturday that organised retail is among the most documented and transparent segments of the economy, having invested significantly in POS infrastructure nationwide. Compliance assessments, he said, must be data-driven, time-sensitive and technically accurate to avoid undermining businesses that are meeting regulatory requirements.
Representing Tier-1 retail brands operating in malls, on high streets and through standalone outlets, the association was responding to recent concerns over POS connectivity. CAP said it supports the digitisation and documentation drive introduced under the Finance Act 2019 and implemented by the Federal Board of Revenue (FBR), and remains committed to strengthening transparency and tax compliance despite challenging economic conditions.
However, CAP questioned claims that 80 to 90 per cent of Tier-1 branches are “disconnected”, saying such figures require contextual examination. According to the association, lists available on the FBR website appear to be auto-generated around 8:00am, when most physical retail outlets are closed and their POS systems are naturally offline, except for e-commerce operations.
Mehboob said this could create a distorted snapshot of connectivity status. While systems linked to online sales may remain active, brick-and-mortar outlets would legitimately show inactivity outside business hours. Measuring compliance without accounting for operational timing, he added, may lead to misleading conclusions.
CAP also pointed to revenue data, stating that the FBR has reportedly collected around Rs1.55 billion in POS service fees since August 2021, in addition to substantial sales and income tax from compliant retailers, with collections increasing annually. The association said such growth in POS-linked revenue would be unlikely if large-scale or persistent disconnection were occurring.
The association further noted that temporary disconnections may arise from technical or system-related factors rather than deliberate non-compliance. It referred to a decision by the Federal Tax Ombudsman Secretariat (Case No 6431/ISB/ST/2025 dated June 18, 2025), which acknowledged technical considerations. These findings, CAP said, underscore the need to distinguish between operational downtime, system latency and actual compliance violations.
CAP Chairman Asfandyar Farrukh added that a previous POS incentive initiative had demonstrated how consumer engagement can improve documentation behaviour. Its discontinuation over the past two years, he said, slowed that momentum. Incentive-based compliance measures, combined with technical facilitation, could yield stronger results than conclusions drawn from isolated data points.
CAP said it remains willing to work with the FBR through a structured technical review mechanism to refine reporting methodologies, address connectivity issues and expand the tax base in a forward-looking manner.
