Tax body urges amendment to align sales tax law with FBR’s digital registration procedures
The Karachi Tax Bar Association (KTBA) has highlighted procedural hurdles in the Federal Board of Revenue’s (FBR) online tax system, saying registered taxpayers face difficulties in declaring business bank accounts because the prescribed sales tax registration form is no longer available on the tax authority’s digital platform.
In its budget proposals for 2026-27, the KTBA pointed to issues related to Section 73 of the Sales Tax Act, 1990, which governs the declaration and use of business bank accounts by registered sales taxpayers.
Under the current legal framework, a business bank account is defined as an account used by a registered taxpayer and declared to the Commissioner through Form STR-1. However, the association said Form STR-1 is no longer available through the FBR’s online registration system.
According to the KTBA, taxpayers seeking to update their registration details through the eFBR portal are redirected to the IRIS platform, where amendments are processed through Form 181 (Form of Registration), which is prescribed under Section 181 of the Income Tax Ordinance, 2001.
The association said the continued reference to Form STR-1 in Section 73 has created a legal and operational inconsistency, as taxpayers are currently using Form 181 to make registration amendments and declare business bank accounts.
“Form STR-1 does not exist in the online environment, while all changes in taxpayer particulars are being processed through the IRIS portal using Form 181,” the KTBA said in its budget recommendations.
To resolve the issue, the association has proposed replacing the reference to Form STR-1 in Section 73 of the Sales Tax Act with Form 181. It said the amendment would bring the law in line with the procedures currently being followed on the FBR’s digital platforms and remove uncertainty for registered taxpayers.
Tax practitioners believe that eliminating such discrepancies could improve compliance, reduce administrative disputes and make it easier for businesses to meet documentation requirements linked to banking transactions and sales tax claims.
The proposal is part of a broader set of tax reform recommendations submitted by the KTBA ahead of the federal budget 2026-27, aimed at simplifying tax procedures and improving the efficiency of Pakistan’s tax administration system.
