The Federal Board of Revenue (FBR) has announced that FBR sales tax integration will be mandatory for a wide range of service providers starting July 1, 2025, to ensure real-time reporting of services under the updated Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
According to the newly updated Ordinance via the Finance Act 2025, the FBR has specified that from the effective date, all service providers listed in Table 1 and Table 2 of the Schedule must integrate their businesses with the Board’s computerized system for FBR sales tax integration and real-time reporting.
The law states:
“From such date and in such mode and manner, as may be prescribed through a general order by the Board, any service provider as mentioned in Table 1 and Table 2 of the Schedule shall integrate his businesses with the Board’s computerized system for real-time reporting of provision of services.”
Table-1 of the Schedule covers around 60 different types of services. These include services offered by hotels, motels, guest houses, farmhouses, marriage halls, lawns, clubs, caterers, courier services, cargo services by road through courier companies, construction services, and other services as outlined in the Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
Similarly, Table-2 lists additional categories of service providers who will also be required to comply with this mandatory FBR sales tax integration.
The updated Ordinance also allows the FBR to issue a Negative List through official notification, exempting certain services from this requirement. It states that “the Board may, whenever deemed necessary, subject to such conditions, restrictions and limitations, specify a Negative List of services exempt from tax under this Ordinance in Table-3 to the Schedule.”
This new compliance push is part of the FBR’s broader efforts to digitize tax collection, improve transparency, and curb tax evasion within the service sector across the Islamabad Capital Territory.