New proposal aims to strengthen tax compliance and accountability for non-resident shipping operators through locally authorized representatives.
The federal government has proposed a significant change to Pakistan’s shipping and taxation framework through the Finance Bill 2026, presented as part of the Pakistan Budget 2026-27.
The proposed amendment seeks to formally introduce the concept of an “authorized shipping agent” to improve compliance, accountability, and tax administration for foreign shipping entities operating in the country.
According to A.F. Ferguson & Co analysis on budget 2026-27, an authorized shipping agent would refer to any person in Pakistan who is expressly or implicitly authorized by a non-resident shipowner, charterer, or vessel operator to act on their behalf concerning a ship or voyage.
The measure is designed to establish a clear local representative responsible for handling various operational and financial obligations associated with maritime activities.
According to the proposed framework, the authorized shipping agent will be entrusted with responsibilities related to the receipt, collection, management, and accounting of freight charges and related revenues.
The agent may also be responsible for cargo documentation, manifest submissions, freight reporting requirements, and the management or control of freight-related receipts connected to a specific vessel or voyage.
Additionally, the agent will be required to submit relevant tax returns under the applicable legal provisions.
The Finance Bill further proposes that the authorized shipping agent be recognized as the official representative of the non-resident shipping entity within Pakistan.
This designation would carry substantial legal and financial responsibilities, including joint and several liability for tax payments and other obligations linked to the vessel or voyage.
Furthermore, the authorized shipping agent would share responsibility for compliance requirements alongside the ship’s master. This includes participation in assessments, legal proceedings, tax recovery actions, and other regulatory matters arising from shipping operations.
Industry observers believe the proposed amendments are intended to create a stronger compliance mechanism by identifying a clearly accountable local representative.
By imposing joint liability and assigning defined responsibilities, the government aims to enhance transparency, improve tax collection, and streamline regulatory oversight of international shipping activities operating through Pakistani ports.
If approved, the new framework could play a key role in strengthening Pakistan’s maritime tax administration and ensuring greater compliance by foreign shipping operators conducting business in the country.
