The Federal Board of Revenue (FBR) has proposed the introduction of a new system for the issuance and recording of sales tax invoices as part of broader efforts to modernise and strengthen Pakistan’s tax administration framework.
During a meeting of the Senate Standing Committee on Finance, several amendments to the Sales Tax Act, 1990 were presented for consideration. Among the proposed reforms is the introduction of an “Advance Receipt Invoice” system, aimed at improving transparency, documentation and digital integration within the tax regime.
FBR officials informed the committee that the proposed amendments also seek to incorporate a legal definition of the National Faceless Centre into the Sales Tax Act. In addition, provisions have been included for the implementation of a Production Monitoring System to enhance oversight of manufacturing output and sales activity.
The committee was informed that retailers with an annual turnover exceeding PKR 200 million will be brought under the new tax framework. During the discussion, Committee Chairman Senator Saleem Mandviwalla questioned the necessity of introducing advance receipt invoices when taxes are already being collected through existing mechanisms.
Responding to the concerns, Minister of State for Finance Bilal Azhar Kayani explained that businesses with an annual turnover of PKR 200 million would be required to make a fixed payment of PKR 25,000. In return, they would receive an FBR-issued “Green Plate”, intended to recognise compliant businesses and provide protection from unnecessary official interference.
According to FBR representatives, the implementation of electronic invoicing will improve the monitoring of commercial transactions and support efforts to broaden the tax base. Officials stated that the initiative forms part of a wider strategy to increase documentation of economic activity and improve revenue collection.
The committee was further informed that approximately 3.7 million commercial electricity meters exist nationwide, while only around 100,000 businesses are currently registered within the tax system. Officials argued that even partial inclusion of the remaining businesses in the tax net could generate substantial additional revenue.
Federal Finance Minister Muhammad Aurangzeb stated that the Government is moving towards separating tax policy from tax collection functions. He added that consultations with the business community will continue throughout the year to ensure that reforms are implemented effectively and in a manner that supports economic growth.
The proposed measures reflect the Government’s ongoing efforts to digitise tax administration, expand the tax base and improve compliance across the retail and commercial sectors.
