Pakistan’s Federal Board of Revenue (FBR) on Tuesday (Jan. 4) pushed back the deadline for the country’s corporate sector to switch to digital payments to Jan. 31, according to a Pakistan Today report.
“Taking cognizance of various representations filed by taxpayers, the FBR is pleased to extend the deadline for digital payments by the corporate sector stipulated under Section 21(1a) of the Ordinance up to January 31, 2022,” the FBR announcement says.
This is the third time the tax department has extended the deadline since the initiative was handed down last year. The first deadline was set for October 2021, while the most recent one expired at the end of the year.
Business leaders had originally asked for a one-time extension of at least six months but were rebuffed in that request, the Pakistan Today report says.
The FBR has overhauled the Tax Laws (3rd Amendment) Ordinance, 2021, in an effort to document the economy, capture supply chains and broaden the tax base.
A clause in the new ordinance makes it mandatory for companies to make digital payments on expenditures of more than Rs250,000 (about $3,354). Utility bills, freight charges, travel and payment of taxes and fines can still be paid in cash or through traditional banking means under the new structure.
Almost 99% of all business transactions in Pakistan are done using cash, according to the country’s tax department. Third-party payments are another popular business practice across Pakistan.
Related: State Bank of Pakistan Opens Doors to Digital Banking
Meanwhile, the State Bank of Pakistan (SBP) this week introduced a licensing and regulatory framework for digital banking to create a bank that will offer all the services of a traditional bank without requiring customers to visit a physical branch.
The SBP can now grant licenses to two types of digital banks, retail banks and full banks, which can serve retail customers and corporate/business clients. The SBP notes the “demand for banking services is also faith sensitive and there is a large market for Sharia compliant services.”
SBP will offer licenses for conventional and Islamic banks.
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