The government is discussing whether to implement a new proposal in the budget (2023–24) to impose a ban on cash transactions in retail stores and food retail outlets/restaurants beyond a specified threshold beginning on July 1, 2023.
The Federal Board of Revenue (FBR) is looking into the viability of this idea and whether it will result in additional documentation.
The plan is feasible, according to sources, but it is yet unclear whether or not it would be viable in practise. Major limitations on cash transactions beyond a particular threshold would encourage electronic payments.
It is advised that cash transactions beyond a specific threshold, such as Rs 10,000 and Rs 5,000, not be permitted at retail stores and restaurants that provide food. It is preferable to encourage non-cash payment alternatives like debit/credit cards, mobile payments, or other electronic ways.
For this reason, retail establishments should be compelled to install Point of Sale (POS) devices that accept non-cash transactions. Furthermore, the government ought to offer incentives to merchants who embrace electronic payment methods.
The promotion of electronic payments and limitations on cash transactions beyond a specific threshold can increase the retail industry’s openness and accountability.
By ensuring that every transaction is recorded and traceable, it would lessen the chance of tax evasion and other illicit activities. Additionally, it will promote financial inclusion and the usage of banking services while also offering information that may be put to use, according to sources.