Finance Act 2026 targets developers and suppliers of software that enables invoices violating Sindh sales tax regulations.

KARACHI: The Sindh government has introduced stringent penalties of up to Rs1 million for individuals and companies involved in designing, developing, customising or supplying invoicing software that enables the issuance of invoices in violation of provincial sales tax laws.

The new provision has been enacted through the Sindh Finance Act, 2026 as part of the provincial government’s broader efforts to strengthen tax compliance, improve digital documentation and curb tax evasion through non-compliant invoicing systems.

Under the amended law, any person who designs, develops, customises or supplies invoicing software that facilitates the issuance of invoices which do not comply with sub-rule (1) of Rule 29 of the Sindh Sales Tax on Services Rules, 2011, or Rule 6 of the Sindh Sales Tax Special Procedure (Online Integration of Business) Rules, 2022, will be liable to financial penalties.

The legislation prescribes a minimum penalty of Rs100,000, which may be increased to Rs1 million, depending on the nature and seriousness of the violation.

The amendment is aimed at ensuring that invoicing software used by businesses fully complies with the Sindh Revenue Board (SRB) requirements governing electronic invoicing and the online integration of taxable businesses.

Tax experts said the measure is expected to discourage the development and distribution of software capable of generating invoices that bypass statutory requirements, thereby enhancing transparency, reducing opportunities for tax evasion and improving the documentation of taxable transactions.

The latest amendment forms part of a wider package of tax reforms introduced through the Sindh Finance Act, 2026, reflecting the provincial government’s focus on strengthening digital tax administration, enhancing compliance and increasing provincial revenue collection through improved enforcement mechanisms.