The Federal Board of Revenue (FBR) has made it compulsory for distributors and retailers to integrate their business systems with the FBR’s digital network if their monthly deductible withholding tax exceeds Rs. 100,000 for distributors and Rs. 500,000 for retailers. The directive was announced through SRO 2071(I)/2025, issued in Islamabad on Tuesday.
According to the FBR, distributors and retailers falling under these thresholds are now required to link their operations with the tax authority’s monitoring system to ensure better documentation and oversight of commercial transactions. This directive has been introduced under Section 50 of the Sales Tax Act, 1990, in conjunction with Sections 22 and 23. A new sub-rule has also been added to Rule 150Q of the Sales Tax Rules, 2006, making system integration mandatory for eligible businesses.
The FBR explained that Section 236G of the Income Tax Ordinance pertains to advance tax on sales to distributors, dealers, and wholesalers, while Section 236H covers advance tax on sales to retailers. By integrating their systems with the FBR, businesses will ensure that these transactions are properly documented and monitored in real time.
The move is part of the government’s broader strategy to expand the tax base, improve compliance, and strengthen digital transparency across the supply chain. By promoting automation and data connectivity, the FBR aims to curb tax evasion and streamline monitoring processes for high-volume commercial activities in Pakistan.