The Institute of Chartered Accountants of Pakistan (ICAP) has proposed a significant expansion in the role of chambers of commerce to support tax enforcement efforts, recommending that district chambers become active partners in bringing undocumented businesses into the formal economy.
The proposal, submitted as part of recommendations for the Federal Budget 2026-27, aims to help broaden Pakistan’s tax base and improve compliance by strengthening collaboration between the business community and tax authorities.
According to ICAP, the Federal Board of Revenue (FBR) alone cannot effectively monitor Pakistan’s vast informal sector, which includes large segments of retail, wholesale and small-scale manufacturing businesses. The institute believes district chambers can play a vital role in facilitating compliance and encouraging voluntary tax registration.
A key recommendation is the establishment of Tax Facilitation Desks within district chambers of commerce nationwide. These desks would be jointly operated by representatives of 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 the Islamabad Capital Territory tax administration.
ICAP said the initiative would create a structured platform for cooperation between businesses and tax authorities, helping formalize economic activity through support and guidance rather than relying solely on audits and enforcement actions.
Data Sharing to Encourage Compliance
The institute has also proposed sharing anonymized district-level tax compliance data with chambers of commerce. The objective is to highlight sector-wise and regional tax trends while protecting taxpayer confidentiality.
According to ICAP, access to such information could encourage self-regulation within business communities by creating peer pressure and promoting greater awareness of compliance gaps across sectors.
Joint Targets and Digital Monitoring
Under the proposal, district chambers and tax authorities would establish joint compliance targets focused on increasing taxpayer registrations and expanding documented economic transactions.
To support these efforts, ICAP has recommended the development of a real-time digital dashboard that would monitor compliance indicators, track progress and measure performance against agreed objectives.
National Ranking System for Chambers
ICAP further suggested introducing a nationwide ranking framework to assess the contribution of district chambers toward improving tax compliance and revenue documentation.
The rankings would be based on indicators such as growth in taxpayer registrations, increases in documented transactions, improvements in audit outcomes and support for revenue mobilization. Annual performance results would be made public to encourage competition and accountability among chambers.
The institute also proposed that chambers consistently failing to meet performance standards, or those affected by excessive political influence, could face the risk of losing official recognition.
International Examples Highlighted
In support of its recommendations, ICAP cited successful international models where business associations have worked closely with tax authorities to improve compliance.
The institute referred to Turkey’s Union of Chambers and Commodity Exchanges (TOBB) and Rwanda’s district-level revenue committees, which have been credited with strengthening tax compliance and enhancing revenue collection. Rwanda, in particular, increased its tax-to-GDP ratio from approximately 12 percent to more than 16 percent through similar collaborative approaches.
ICAP believes that adopting such models in Pakistan could help accelerate the formalization of businesses, improve voluntary compliance and strengthen the country’s revenue base.
The recommendations come at a time when Pakistan continues to face challenges in expanding its tax net, with policymakers seeking new strategies to document economic activity and reduce dependence on indirect taxation.
