Islamabad: The Federal Board of Revenue (FBR) has announced that businesses failing to integrate their invoicing systems with its digital platform will face hefty penalties starting September 1, 2025.
Under Section 25A of the Sales Tax Act, 1990, sales tax-registered persons, including importers, public companies, and enterprises with an annual turnover exceeding PKR 1 billion in the last twelve tax returns, are required to issue electronic invoices carrying an FBR invoice number, QR code, and logo.
According to the enforcement plan, non-compliant firms can be fined PKR 500,000 for the first violation. Repeated non-compliance may lead to higher penalties of PKR 1 million, PKR 2 million, and up to PKR 3 million.
Experts caution that any sales tax invoices issued outside the FBR’s e-invoicing system after September 1 will be deemed illegal. Purchasers of such invoices will not qualify for input adjustments, potentially affecting compliance and tax credits.
While larger companies and public firms are seen as better prepared to comply with the requirements under SRO 1413(I)/2025, small, medium, and seasonal importers may face difficulties in meeting the integration deadline.
Tax specialists have urged the FBR to consider an extension in light of severe flooding that has disrupted businesses across the country. However, they also stressed that registered taxpayers should move swiftly to adopt electronic invoicing, which will help curb the circulation of fake or “flying” invoices.
The FBR maintains that the shift to digital invoicing is aimed at enhancing documentation, improving compliance, and plugging revenue leakages in the sales tax regime.
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