The Federal Board of Revenue (FBR) is expected to broaden the scope of sales tax on services within the Islamabad Capital Territory (ICT) in the upcoming federal budget for the fiscal year 2025-26.

Sources indicate that one of the major changes under consideration includes the introduction of a 4% sales tax on ride-hailing services (cab aggregators) operating in the federal capital. This measure is aligned with FBR’s ongoing efforts to bring digital and service-based platforms into the formal tax net.

Currently, provincial revenue authorities such as PRA, SRB, and KPRA are charging a 5% sales tax on ride-hailing services in their respective jurisdictions. The proposed 4% tax by FBR would align Islamabad’s treatment of such services with those prevailing in the provinces, while providing a slight competitive advantage in rate.

FBR is already levying 15% sales tax under the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 on a broad array of services, including:

• Hotels, motels, guest houses, farmhouses

• Marriage halls, lawns, clubs, and caterers

• Information technology (IT) and IT-enabled services

• Other professional, business, and support services

The proposed tax on ride-hailing services is likely to be part of a broader initiative to enhance revenue collection from the rapidly growing digital economy. In addition, the FBR is also reviewing changes to the withholding tax regime, particularly focused on increasing withholding tax rates on e-commerce platforms.

These proposals are expected to be finalized and announced in the federal budget for 2025-26, aimed at improving documentation, increasing tax compliance, and expanding the tax base in the service sector, especially within the ICT region.

PRAL to Provide Free Digital Invoicing Integration Services Ahead of FBR’s New E-Invoicing Mandate

Lahore, Pakistan – In a recent awareness session organized by the All Pakistan Textile Mills Association (APTMA), Pakistan Revenue Automation Limited (PRAL) reaffirmed its commitment to offering free-of-cost digital invoicing integration services to taxpayers. The session was attended by APTMA members and led by senior officials from PRAL and FBR.

Abid Naeem, General Manager of PRAL, announced that integration with the FBR’s digital invoicing system will be mandatory for all taxpayers starting June 1, 2025, for the corporate sector, and July 1, 2025, for non-corporate entities. He emphasized that PRAL is ready to assist all taxpayers in achieving seamless compliance with the new mandate—at no additional cost.

Asad Shafi, Chairman APTMA North, welcomed the PRAL team and praised the initiative, noting that the awareness session was vital in educating taxpayers on the upcoming transition. He referred to Rule 150Q of the Sales Tax Rules, 2006, which mandates electronic integration of systems used for invoice generation and transmission through licensed integrators. Asad highlighted that PRAL has officially been notified as a Licensed Integrator under Rule 150XF to facilitate this compliance process.

He added that PRAL’s decision to organize training and awareness seminars across the country will play a critical role in helping taxpayers understand and prepare for the new invoicing system. He expressed hope that such sessions will not only clarify compliance requirements but also demonstrate how digital invoicing can transform financial operations, enhance transparency, and improve efficiency.

Speaking at the session, Abid Naeem underscored the importance of embracing technological innovation in business operations. He explained that PRAL is offering end-to-end support for integration, including structured implementation, technical assistance, and ongoing compliance support. The goal is to simplify the process for businesses and help them avoid penalties by ensuring full compliance with regulatory requirements.

He further noted that with the introduction of SRO 69(I)/2025 by the Federal Board of Revenue (FBR), Pakistan’s financial and tax systems are undergoing a major digital transformation. Businesses must adapt to electronic invoicing to remain compliant and maintain transparency in their operations. The seminars conducted by PRAL aim to reduce resistance to change by offering practical steps, demonstrations, and answers to common concerns raised by taxpayers.

Abid reiterated PRAL’s long-standing role in promoting digital innovation in Pakistan’s tax ecosystem. The organization is enabling businesses to smoothly integrate electronic invoicing with their existing ERP systems and workflows. These awareness sessions also address common challenges and misconceptions around FBR-compliant e-invoicing, ultimately helping participants understand the benefits of automation, real-time data visibility, and streamlined financial reporting