Web Desk
The government is currently contemplating an innovative proposal for the upcoming budget (2023-24) to impose a ban on cash transactions above a specified limit at retail outlets and food retail establishments/restaurants, effective from July 1, 2023.
The Federal Board of Revenue (FBR) is evaluating the feasibility of this proposal and its potential impact on enhancing documentation.
Sources have revealed that the proposal holds promise, but the key question remains whether its implementation would be practically achievable. These significant restrictions on cash transactions beyond a designated limit aim to encourage the adoption of electronic payment methods.
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It is recommended that cash transactions beyond a specific threshold, such as Rs 10,000 and Rs 5,000, should be disallowed at retail outlets and food establishments/restaurants. Instead, non-cash payment options like debit/credit cards, mobile payments, or other electronic means should be actively encouraged for transactions.
To facilitate this, retail outlets should be required to install Point of Sale (POS) machines that accept non-cash payments. Additionally, the government should provide incentives to retailers for embracing electronic payment systems.
Imposing restrictions on cash transactions beyond a certain limit while promoting electronic payments can bring about transparency and accountability in the retail sector. This approach ensures that all transactions are recorded and traceable, thereby reducing the potential for tax evasion and illicit activities. Moreover, it stimulates the utilization of banking services, fosters financial inclusion, and generates actionable information, according to the sources.
