Provinces Oppose FBR Digital Invoicing Integration Plan

Provincial tax authorities have raised objections to a proposal issued by the Federal Board of Revenue under draft notification SRO 288(I)/2026, which seeks to incorporate service providers, professionals and related businesses into the federal tax authority’s computerised documentation and electronic invoicing framework.

According to reports, the Provincial Revenue Authorities have urged the FBR to delay issuing the final notification until formal consultations are conducted with provincial tax bodies, arguing that the proposed framework may create overlapping regulatory obligations for businesses already subject to provincial tax regimes.

Under the draft proposal, entities integrated with the FBR’s digital system would be required to disclose information regarding their business outlets, points of sale (POS) systems and electronic invoicing transactions. The proposed rules would also require businesses to conduct supplies exclusively through registered outlets, POS terminals or electronic invoice-generating machines connected to the FBR’s central platform.

In correspondence with the FBR, the Balochistan Revenue Authority stated that the proposed amendments to Chapter VII-A of the Income Tax Rules, 2002 would significantly expand documentation requirements for service providers listed in the schedule of the rules.

The authority noted that many of these services are already subject to sales tax on services under provincial legislation. It further highlighted that several businesses have already integrated their POS systems with provincial digital platforms, including systems established under the Balochistan Sales Tax Special Procedure (Online Integration of Business) Rules.

According to the authority, obligating such businesses to simultaneously connect to both federal and provincial digital systems could result in compliance complications and regulatory duplication.

Similarly, the Sindh Revenue Board has raised comparable concerns, stating that the proposed amendments should have been discussed with provincial tax authorities prior to the issuance of the draft notification.

The SRB emphasised that a number of services listed in the draft rules are already required to integrate their POS systems with the provincial tax authority under the Sindh Sales Tax Special Procedure (Online Integration of Business) Rules, suggesting that the proposed federal system could overlap with existing provincial compliance frameworks.