Eligible taxpayers can claim a 10 percent tax credit on qualifying investment made to integrate with the FBR’s computerised system.
ISLAMABAD: The Federal Board of Revenue (FBR) has introduced a 10 percent tax credit for taxpayers incurring eligible expenditure to integrate their systems with the FBR’s computerised system during Tax Year 2027.
The tax credit is available under Section 64D of the Income Tax Ordinance, 2001, as updated up to June 30, 2026.
Who can claim the 10% tax credit?
According to the FBR, the tax credit is available to any person required under the Income Tax Ordinance, 2001, Sales Tax Act, 1990 or Federal Excise Act, 2005 to integrate with the FBR’s computerised system.
Such integration may be required for real-time production monitoring or for recording and reporting sales or receipts.
Under Section 64D, eligible taxpayers can claim the credit on expenditure incurred exclusively for the purchase, acquisition, installation or implementation of equipment, hardware, software or other electronic components directly and exclusively used for the required integration.
The FBR may prescribe additional limitations, conditions and restrictions governing the availability of the tax credit.
Tax credit linked to qualifying investment
The law provides that the tax credit allowed in the tax year in which the electronic resource is installed, integrated and configured with the FBR’s computerised system will be 10 percent of the amount actually invested in the electronic resource.
The provision allows eligible taxpayers to obtain relief against their normal tax liability based on qualifying investment made to meet the FBR’s digital integration requirements.
However, the tax credit does not cover operating and maintenance expenses associated with the electronic resource.
Section 64D specifically excludes expenditure incurred on the operation and maintenance of the electronic resource from the tax credit.
Credit available against normal tax
The FBR has clarified that the tax credit is available only against normal tax payable under Division I or Division II of Part I of the First Schedule to the Income Tax Ordinance, 2001.
Therefore, the provision is linked specifically to normal tax liability and does not constitute a general credit against every form of tax payable by a taxpayer.
FBR promotes digital tax integration
The tax credit provides a fiscal incentive for businesses required to integrate their systems electronically with the FBR.
The measure also supports the tax authority’s wider move towards real-time monitoring, electronic reporting and digital documentation of business transactions.
Taxpayers seeking to claim the credit will need to ensure that the relevant equipment, hardware, software or electronic components are used directly and exclusively for the prescribed integration purposes and comply with any conditions or restrictions subsequently imposed by the FBR.