ISLAMABAD: A weekly “cashless” market has been opened for the first time in Pakistan’s capital of Islamabad to promote digital payments, curb tax evasion and encourage small businesses to adopt cashless transactions, the market’s manager said.

Pakistan, which has a largely cash-based economy, has stepped up efforts in recent months to promote digital transactions, enhance accountability, reduce corruption and curb tax evasion.

The government activated digital wallets for welfare payments this month, while the Pakistan Airports Authority (PAA) in October introduced a cashless model at airports as part of the digitization push.

Raja Asad, the Islamabad weekly market manager, said it was opened in line with Prime Minister Shehbaz Sharif’s Digital Pakistan Vision, which is aimed at transforming the country into a digitally empowered society.

“There are approximately 2,743 stalls here,” he said. “Ninety-nine percent of them are completely cashless and this is the first market in Pakistan that is cashless.”

Pakistan, with a population exceeding 240 million, has one of the lowest tax-to-GDP ratios in South Asia. The government of Prime Minister Shehbaz Sharif has set a record collection target of Rs14.13 trillion ($47.4 billion) for the 2025–26 fiscal year — an increase of 9 percent over last year.

The target forms part of efforts to meet structural reform benchmarks under a $7 billion IMF bailout program, which calls for an increase in the tax-to-GDP ratio.

Vendor Muhammad Khalid described the cashless market strategy as “very good,” saying it was convenient for both the public and vendors.

“Sometimes people don’t have money in their pockets,” he said. “The payment goes online. It goes to the account. This is a good thing.”
Muhammad Arshad, another vendor, welcomed the initiative but raised concern over Internet reliability.

“There is so much rush here that the Internet doesn’t work sometimes. Day before yesterday when the market was on there were three to four customers who wanted to pay but because of the slow Internet they couldn’t do it,” he said.

“Then they paid in cash. There is an issue of the Internet. There is no doubt about it. It slows down, doesn’t work, and it takes time.”

Kiran Fatima, a customer at the weekly market, complained that some vendors were deliberately refusing digital payments due to “scanner issues,” adding that she was successful in paying through Easypaisa’s e-wallet.

” Authorities should look into this because if the government has installed something, then everyone should use the scanner,” she said.

“Because we pay the tax anyway. So, this is also a good thing that we don’t have to pay cash.”

— With input from AFP