Pakistan commits to stricter enforcement of digital invoicing under IMF-backed reforms
The Federal Board of Revenue (FBR) is set to propose stricter penalties for taxpayers failing to comply with digital sales tax invoicing requirements in the upcoming Finance Bill 2026, as part of Pakistan’s commitments under reforms linked to the International Monetary Fund.
According to official documents, Pakistan has assured the IMF that the FBR will introduce legal amendments aimed at strengthening enforcement against non-compliance with the digital invoicing regime.
Digital invoicing rollout gains pace
Under the existing framework, all entities registered as sales tax filers were required to register on the FBR’s digital invoicing platform by December 31, 2025.
However, by the end of March 2026, only around one-third of registered taxpayers were reportedly issuing live digital invoices through the system.
To accelerate adoption, the FBR plans to issue two notifications by the end of March 2026 allowing easier correction of invoicing errors and permitting multiple licensed integrators to connect with the system.
Officials expect all active sales taxpayers to adopt the digital invoicing system by July 31, 2026.
FBR expects Rs46 billion additional revenue
The new digital invoicing mechanism has been designed to simplify sales tax filing procedures and automate the calculation of sales tax liabilities for taxpayers.
Authorities believe the system will improve monitoring of business transactions and reduce tax evasion, potentially generating an additional Rs46 billion in revenue during fiscal year 2026-27.
Pakistan Revenue Automation Limited (PRAL) has assigned 16 personnel to support the operation of the system.
The FBR will monitor the performance of the digital invoicing initiative through key performance indicators, including the total value of invoices processed digitally and the number of taxpayers issuing live invoices on the platform.
The proposed penalties and enforcement measures are part of broader tax administration reforms aimed at improving documentation of the economy and strengthening revenue collection.