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The Federal Board of Revenue (FBR) has ordered digital integration for selected service providers, with digital integration to begin on July 1, 2025, under new tax rules.
According to the Finance Act 2025, the updated ICT (Tax on Services) Ordinance, 2001, requires selected businesses to report services digitally. The goal is better transparency and real-time tax compliance.
The move covers businesses in Table 1 and Table 2 of the law’s Schedule. These include hotels, couriers, marriage halls, caterers, and other service sectors mentioned under the updated ordinance.
Service providers will need to connect their billing systems to the FBR’s computerized system. This integration allows real-time reporting of services provided within Islamabad’s jurisdiction.
Table 1: Over 60 service categories must comply. These include motels, guest houses, farmhouses, clubs, construction services, and cargo companies offering road transport services.
Table 2: Expanding the list of businesses that must go digital. Exact integration procedures will be detailed by the FBR through a general order.
While integration is mandatory, the FBR can publish a Negative List. This will include services exempt from tax, listed in Table 3 of the updated Schedule.
The Negative List will be issued through official Gazette notifications. It gives the FBR flexibility to exclude certain services from the digital reporting requirement.
