Provincial tax authorities oppose FBR’s move to link service providers to federal POS, e-invoicing system

Provincial Revenue Authorities (PRAs) have opposed the Federal Board of Revenue’s proposed SRO 288(I)/2026, which seeks to integrate services, professionals and service providers into the FBR’s computerised system for income tax documentation and electronic invoicing, Business Recorder reported. 

The authorities have asked the FBR not to issue the final notification until consultations are held with provincial tax bodies, arguing that the proposal may create duplication in regulatory requirements.

Under the draft notification, businesses integrated with the FBR’s online system would be required to report details of outlets, points of sale and electronic invoicing transactions. The rules also require supplies to be made only through registered outlets, POS systems or electronic invoice-issuing machines connected to the FBR platform.

In a letter to the FBR, the Balochistan Revenue Authority said the proposed amendments to Chapter VII-A of the Income Tax Rules, 2002, would significantly broaden documentation requirements for service providers listed in the schedule of the rules.

The authority said many of these services are already subject to sales tax on services under provincial laws and that some businesses have already integrated their POS systems with provincial platforms, including the Balochistan Sales Tax Special Procedure (Online Integration of Business) Rules.

It warned that requiring the same businesses to connect to both federal and provincial systems could create compliance challenges and regulatory duplication.

The Sindh Revenue Board has also raised similar concerns, saying the proposed amendments should have been discussed with provincial authorities before issuing the notification.

The SRB noted that several services listed in the draft rules are already required to integrate their POS systems with the Sindh tax authority under the Sindh Sales Tax Special Procedure (Online Integration of Business) Rules.