FBR Extends Sales Tax Integration Deadline to June and July 2025

The Federal Board of Revenue (FBR) has granted a one-month extension for corporate and non-corporate sales tax taxpayers to electronically integrate their systems with the customs computerized platform, setting new deadlines of June 1, 2025, for corporate taxpayers and July 1, 2025, for non-corporate taxpayers—a development with critical tax compliance implications. Our tax law firm advises clients to prioritize this integration process to avoid penalties under FBR oversight.

This extension, outlined in a recent FBR directive to Chief Commissioners, Large Taxpayers Offices (LTOs), Medium Taxpayers Offices (MTOs), Corporate Tax Offices (CTOs), and Regional Tax Offices (RTOs), builds on Section 74 of the Sales Tax Act, 1990, mandating electronic invoice transmission. The original deadlines—May 1, 2025, for corporate taxpayers and June 1, 2025, for non-corporate taxpayers—have been extended to streamline tax collection, aligning with ongoing revenue system reforms, as web sources like Dawn report FBR’s push for digitalization amid IMF pressure to enhance tax compliance.

From a tax law perspective, this integration is non-negotiable—failure to comply risks fines (up to Rs50,000 or 5% of tax due, per historical FBR penalties under Section 33) and audit triggers. Businesses must ensure accurate data transmission, as errors could lead to disallowance of input tax credits under Section 8B, requiring reconciliation with VAT records. The extension offers a reprieve, but the FBR’s emphasis on real-time reporting signals heightened scrutiny, especially for large taxpayers and importers, whose customs transactions are now under tighter digital oversight.

Critically, the establishment narrative of “streamlining tax collection” may mask an aggressive push to plug revenue leakages—web reports like The Express Tribune suggest this move targets non-compliant sectors, such as retail and manufacturing, amid Pakistan’s chronic tax gap. Clients should anticipate future compliance mandates and prepare accordingly.

Our firm advises clients to accelerate system integration, ensure compliance with Section 74, and safeguard tax credits, bracing for FBR audits in this digital tax era.