Businesses integrating with FBR’s real-time digital systems to receive 10% tax credit on eligible technology investments
ISLAMABAD: The federal government has introduced a new tax incentive through the Finance Act, 2026 to encourage businesses to integrate with the Federal Board of Revenue’s (FBR) digital systems by offering a tax credit on investments in eligible electronic infrastructure.
The Finance Act has inserted Section 64D into the Income Tax Ordinance, 2001, granting a tax credit to taxpayers required to connect with the FBR’s computerised systems for real-time production monitoring and the electronic recording or reporting of sales and receipts.
10% tax credit on eligible investments
Under the newly inserted provision, any person required under the Income Tax Ordinance, 2001, the Sales Tax Act, 1990 or the Federal Excise Act, 2005 to integrate with the FBR’s computerised system will be entitled to a tax credit equal to 10% of the amount invested in eligible electronic resources.
The tax credit will be available for expenditure incurred exclusively on the purchase, acquisition, installation and implementation of equipment, hardware, software and other electronic components directly used to integrate with the FBR’s digital platform.
The incentive will apply only in the tax year in which the electronic resources are installed, integrated and fully configured with the FBR’s computerised system.
Conditions for claiming the credit
The Finance Act empowers the FBR to prescribe the conditions, limitations and restrictions governing the availability of the tax credit.
The legislation also makes it clear that operational, maintenance and recurring expenses incurred after the installation of the electronic systems will not qualify for the incentive.
Furthermore, the tax credit will be adjustable only against normal tax liability under Division I or Division II of Part I of the First Schedule to the Income Tax Ordinance, 2001.
Supporting digital tax compliance
The introduction of Section 64D forms part of the government’s broader strategy to accelerate the digital transformation of Pakistan’s tax administration by encouraging businesses to adopt real-time electronic reporting systems.
The FBR has progressively expanded mandatory digital integration across manufacturers, retailers, wholesalers, importers and other sectors to improve tax compliance, enhance transparency and reduce tax evasion.
By offering a tax credit on technology-related investments, the government aims to lower compliance costs for businesses while supporting the wider implementation of digital invoicing, production monitoring and electronic sales reporting systems.
Tax experts believe the incentive will encourage more businesses to invest in modern digital infrastructure, facilitating smoother compliance with FBR requirements while strengthening documentation of the economy.
The new provision came into force under the Finance Act, 2026 and is expected to promote broader adoption of the FBR’s digital ecosystem across Pakistan’s business community.
