ISLAMABAD: Provincial Revenue Authorities (PRAs) have opposed the Federal Board of Revenue’s SRO No. 288(I)/2026, which seeks to integrate services, professionals, and service providers with the FBR’s computerized system for income tax purposes.
The PRAs have also requested the FBR to refrain from issuing the final version of SRO.288(I)/2026 (Online Integration of Businesses).
According to the SRO.288(I)/2026 of the FBR, the integrated enterprises (businesses) through the board’s online system shall provide information on their outlets, points of sale, or electronic invoicing transactions. No supply shall be made by the integrated enterprises except through the integrated outlets, point of sale, or electronic invoice or bill issuing machines.
According to a letter of Balochistan Revenue Authority (BRA) to the FBR, refer to the draft S.R.O.288(1)/2026 dated 18.02.2026, which proposes to substitute the provisions of Chapter VII-A ofthe Income Tax Rules, 2002 and makes it more expansive in terms of documentation and particulars of the invoices of the services described in Schedule in the said Chapter VII-A of the Rules, 2002.
READ MORE: FBR directs businesses, professionals to integrate e-invoicing with income tax system
This proposal by the Federal Board of Revenue (FBR) is meant to mandate real-time electronic invoicing and Point of Sale (POS) integration for a wide range of businesses, including services of restaurants, retailers, and healthcare providers.
The Balochistan Revenue Authority (BRA) formally requests a delay in the issuance of this notification till meaningful discussion between the FBR and the Provisional Authorities, as it will not only cause regulatory duplication but also violate Entry 49 of the Fourth Schedule to the Constitution. Various service providers’ associations, particularly the Pakistan Medical Association (PMA) has strongly opposed such a move as it will cause a dual burden of POS integration both with the FBR as well as the Provincial Revenue Authorities (PRAs).
It is pertinent to mention that almost all the services covered in the aforesaid Schedule of the said Chapter VII-A are liable to sales tax on services and, therefore, it would have been appropriate if FBR would have thoroughly discussed and deliberated the proposed amendments particularly in relation to the proposed clauses (h), (i), (i), (1), (p), (q), (r), (u) and(x) of Sub-Rule (10) of Rule 33B of the Income Tax Rules, 2002 with all the Provincial Revenue Authorities (PRAs). It is also pertinent to mention that some of the services mentioned in the aforesaid Schedule are already required to integrate their POS system with the BRA system in terms of Balochistan Sales Tax Special Procedure (Online Integration of Business) Rules, 2022, as amended in 2006. The FBR may appreciate that duplication of the POS integration system in relation to services liable to Balochistan Sales Tax on Services will create problems both for the BRA and for the registered persons for compliance, the BRA maintained.
The BRA referred to the Memorandum of Understanding signed between the FBR and the BRA in relation to Chapter VII-A of the Income Tax Rules, 2002, which requires information sharing between the FBR and the BRA but the requisite secure and confidential channel for electronic exchange of the tax-related information has not yet been established in terms of paragraph 3(A) of the said MoU. A lack of information regarding input tax claimed by the FBR-registered persons creates issues for the BRA as well as for the BRA-registered persons. Similarly, information regarding taxpayers of income tax existing on FBR NTNs who are service providers or service recipients is also not shared with the BRA, which results in issues for effective implementation for BSTS Act, 2015. It is therefore once again reminded to please establish a requisite, secure, and confidential channel for the electronic exchange of said tax-related information, the BRA added.
The BRA again requests that the FBR delay issuance of the final notification containing a substitution of Chapter VII-A of Income Tax Rules, 2002, till discussing and deliberating this matter with the PRAS in general and with the BRA in particular. Sindh Revenue Board (SRB) has informed the FBR that attention is invited to the draft notification No. S.R.O. 228(1)/2026 dated18.02.2026, which proposes to substitute the provisions of Chapter VII-A of the Income Tax Rules,2002, and makes it more expansive in terms of documentation and particulars of the invoices of the services described in Schedule in the said Chapter VII-A of the Rules, 2002.
It is pertinent that almost all the services as mentioned in the aforesaid Schedule of the said Chapter VII-A are liable to sales tax on services and, therefore, it would have been appropriate if FBR would have discussed and deliberated the proposed amendments [specifically in relation to the particulars (h), (i), (i), (1), (p), (q), (r), (u) and (x) of sub-rule (10) of rule 33B) with Provincial Revenue Authorities (PRAS) in general and with SRB in particular. It is also pertinent to mention that some of the services mentioned in the aforesaid schedule are already required to integrate their POS system with the SRB system in terms of Sindh Sales Tax Special Procedure (Online Integration of Business) Rules, 2022. The FBR may appreciate that duplication of the POS integration system in relation to services liable to Sindh sales tax will create problems for the taxpayers incompliance.
Attention is also invited to the Memorandum of Understanding signed between FBR and SRB on 13th February, 2025, in relation to Chapter VII-A of the Income Tax Rules, 2002, which requires information sharing between FBR and SRB, but the requisite secure and confidential channel for electronic exchange of the tax-related information has not yet been established in terms of paragraph 3 of the said MoU. The SRB has requested the FBR reconsider issuing the final notification containing the substitution of Chapter VII-A of Income Tax Rules, 2002, and, in the meantime, discussing and deliberating this matter with the PRAS in general and with SRB in particular, the SRB added.
Copyright Business Recorder, 2026
Comments