Non-corporate distributors: PCDA urges FBR to reconsider real-time invoicing mandate

KARACHI: The Pakistan Chemists & Druggists Association (PCDA) has appealed to the Federal Board of Revenue (FBR) to grant an exemption and adopt a phased implementation approach for SRO 709(I)/2025, which mandates real-time electronic invoice integration for all non-corporate registered businesses from June 1, 2025.

In a letter addressed to the FBR Chairman, PCDA Chairman Abdul Samad Bhudhani highlighted the severe operational and financial strain the regulation would impose on pharmaceutical distributors—particularly the small and medium-sized enterprises (SMEs) that make up over 80% of the sector.

“While we support FBR’s digitization efforts, the current timeline and blanket application of the mandate are neither realistic nor sustainable,” the letter stated. Bhudhani emphasized that pharmaceutical distribution is a high-volume, low-margin industry, where most businesses process between 15,000 to 25,000 invoices monthly and serve thousands of pharmacies across the country, including remote and semi-urban areas with limited digital infrastructure.

The PCDA noted that many non-corporate distributors lack the technical capacity, IT resources, or financial ability to comply with real-time invoice integration, a system that requires instant connectivity, synchronization, and validation of every sale with FBR’s central database.

Drawing parallels with international practices, the PCDA cited Bangladesh and OECD guidelines, where such measures are rolled out in phases, focused on larger entities first, and backed by cost-benefit analyses and stakeholder engagement.

The Association has made four key recommendations:

1. Immediate exemption from SRO 709(I)/2025 for non-corporate pharmaceutical importers, distributors, and wholesalers.

2. Phased implementation beginning with corporate entities or those exceeding a fixed annual turnover (e.g., Rs. 500 million), followed by others in 12–18 months.

3. Launch of an industry-wide digital readiness assessment and pilot program to test real time invoicing systems in the pharmaceutical sector.

4. Formation of a joint working group including PCDA, FBR, and FPCCI to design practical and sector-sensitive rollout strategies.

Bhudhani warned that an unplanned enforcement of the policy could lead to medicine supply disruptions, closure of small businesses, and a spike in non-compliance—outcomes contrary to the policy's intended goals.

He urged the FBR to consider sector-specific realities and adopt a collaborative approach to reform.

Copyright Business Recorder, 2025