Islamabad, July 2, 2025: The Federal Board of Revenue (FBR) has officially made it mandatory for several service providers to integrate their businesses with its computerized system for real-time reporting of services, starting July 1, 2025.
According to the revised Islamabad Capital Territory (Tax on Services) Ordinance, 2001, as amended by the Finance Act 2025, all businesses falling under Table-1 and Table-2 of the updated schedule must comply with this digital integration requirement. This move is part of FBR’s broader effort to improve tax transparency and digitize the service economy in Islamabad.
Who Is Affected?
Table-1 of the schedule includes over 60 types of services such as hotels, motels, guest houses, farmhouses, marriage halls, clubs, caterers, courier and road cargo services by courier companies, construction services, and many more. Table-2 expands this coverage to additional service categories, ensuring wider tax compliance under the law.
Digital Integration Details
FBR will soon release a general order outlining the specific mode and manner in which businesses must integrate their systems. This real-time reporting mechanism aims to streamline tax collection and reduce evasion, making the system more robust and efficient.
Provision for Exemptions
Despite the wide-ranging applicability, the Ordinance also introduces a provision allowing FBR to declare a Negative List of services that will remain tax-exempt. This list will be published as Table-3 in the official Gazette, subject to certain conditions and restrictions.
This digital shift marks a significant step towards modernizing Pakistan’s tax structure and enhancing fiscal governance in the capital territory.
