Karachi, January 21, 2025 – The Federal Board of Revenue (FBR) has introduced updated rules for sales tax registration under the Sales Tax Rules, 2006, effective for the tax year 2025. These revisions aim to streamline the registration process and enhance compliance among taxpayers in Pakistan.
The FBR has clarified the process under Rule 5 of the updated rules, detailing the application procedure for sales tax registration. According to the FBR, individuals and entities required to register for sales tax must apply electronically using Form STR-1. The application must specify the Regional Tax Office (RTO) based on specific criteria, such as the location of the registered office, factory, or main business operations. This ensures that businesses are registered in the jurisdiction where they operate, promoting efficient monitoring and compliance.
To apply for registration, applicants must submit essential documents, including:
• A bank account certificate in the business’s name.
• Registration numbers for gas and electricity connections.
• Details of all branches in case of multiple locations.
• GPS-tagged photographs of business premises, machinery, and industrial utility meters for manufacturers.
• A balance sheet showing business capital, assets, and liabilities for certain applicants.
The FBR has also mandated biometric verification for individuals, association members, and single-shareholder companies. Registrants must visit an e-Sahulat Centre of NADRA within a month of registration to complete this process. Failure to comply will result in removal from the Active Taxpayer List. Annual biometric re-verification is also required, with non-compliance leading to restrictions on electronic filing unless authorized by the Commissioner through the IRIS system.
For manufacturers, the FBR may require pre-verification, post-verification, or both to validate the authenticity of documents and business operations. Additionally, the field office can scrutinize submitted documents after registration and request any missing information. If the required documents are not provided within 15 days, or if any submissions are found to be fake or invalid, the taxpayer will be removed from the Active Taxpayer List, subject to the approval of the Member (IR-Operations), FBR.
These updates reflect Pakistan’s commitment to strengthening its tax infrastructure and ensuring that all businesses comply with legal requirements. By incorporating digital processes and biometric verification, the FBR aims to curb tax evasion and improve transparency in the taxation system.