In a significant move to enhance Pakistan’s digital tax compliance infrastructure, the Federal Board of Revenue (FBR) has announced the granting of two additional licences to private companies for the integration of electronic invoicing systems. This development marks a key step in modernizing the country’s tax collection mechanisms and improving transparency in retail and other business transactions.
The FBR has finalized two private companies that will now provide the essential online integration services for businesses, including retailers, to link their invoicing systems directly with the FBR’s digital platforms. Prior to this expansion, M/s Haball (Pvt) Ltd., based in Karachi, was the only company licensed by the FBR to facilitate electronic invoicing. The addition of two more licenced companies will increase the number of service providers facilitating e-invoicing to three, alongside the government’s own platform, Pakistan Revenue Automation Limited (PRAL).
PRAL, a public-sector entity, will continue to play a central role in this integration process. It will provide free integration services to registered businesses, particularly targeting retailers, helping them to connect their point-of-sale (POS) systems with the FBR. This move aims to ease the compliance process for smaller businesses, ensuring that they can meet the new digital invoicing requirements without incurring additional costs.
The FBR’s Directorate of Digital Initiatives had invited Expressions of Interest (EOIs) for the award of these licences earlier in March 2024. This initiative is part of the FBR’s broader efforts to streamline the tax system, reduce tax evasion, and increase the ease of doing business in Pakistan. The new licensure is in line with the amendments introduced under Chapter XIV-BB of the Sales Tax Rules, 2006, as well as Chapter VITA of the Income Tax Rules, 2002, which were updated in late 2023 and early 2024.
As per the Sales Tax Rules (SRO 1788(1)/2023), the FBR’s licensing committee reviewed and approved the recommendations for the new licences, which are aimed at ensuring seamless integration of electronic invoicing with the tax authority’s digital systems. The companies that have been granted the licences will now be responsible for providing the necessary technological solutions for businesses to comply with these updated tax regulations.
The integration of e-invoicing is a crucial part of the FBR’s strategy to modernize Pakistan’s taxation system. By digitizing the invoicing process, the government aims to ensure greater accuracy in tax reporting, reduce the risk of fraud, and improve overall efficiency. This move also aligns with the broader trend of digitalization in global tax systems, helping to bring Pakistan’s tax practices in line with international standards.
The role of PRAL as a government-backed licenced integrator is expected to play a significant part in facilitating the transition for businesses to electronic invoicing. Their free-of-cost service for integration with the FBR’s POS system is designed to make compliance easier for the business community, particularly smaller and medium-sized enterprises that may face barriers to adopting new technologies.
The FBR has committed to publishing the list of licensed companies on its website, ensuring transparency and providing clear information for businesses seeking to integrate their systems with the FBR. This effort is part of Pakistan’s ongoing efforts to create a more efficient, transparent, and accessible tax system.
In conclusion, the expansion of licensed integrators for e-invoicing underlines the FBR’s dedication to modernizing Pakistan’s tax collection infrastructure. As more private companies step in to provide digital integration services, businesses will have more options and support in ensuring they meet the FBR’s new invoicing requirements, contributing to a more compliant and digital economy.