Pakistan Sales Tax Rules 2025: Key Updates & Compliance Guidelines

January 22, 2025

At the beginning of 2025, the Pakistani Federal Board of Revenue issued updated extensive Sales and Tax Rules Guidelines. These guidelines provide detailed explanations of all sales tax-relevant issues, from key term definitions to all other relevant matters, including registration, refunds, and penalties.

Latest Changes to Guidelines

In the latest updated version of the guidelines, the Federal Board of Revenue(FBR) clarified that individuals and businesses registering for sales tax purposes must submit Form STR-1 electronically. Based on defined criteria, such as the location of the registered address or office, the application form must specify to which Regional Tax Office the form is submitted.

When submitting an application form for sales tax registration, taxable persons must also provide a bank account certificate, registration numbers for gas and electricity connections, details of all branches of business operating in multiple locations, and GPS-tagged photographs of business premises, machinery, and industrial electricity or gas meter installed.

In addition, the latest update introduced new requirements that individuals, associations of persons, and companies with only one shareholder or member submit a balance sheet showing business capital, assets, and liabilities.

Once the registration is completed, individuals and representatives of legal entities must conduct a biometric verification through the e-Sahulat Centre of NADRA within a month. This verification must be repeated in July every year.

Non-compliance with these rules will ultimately result in the registered person’s name being removed from the sales tax Active Taxpayer List.

Conclusion

These are just a few of the newest changes to Sales and Use Tax Rules Guidelines that reflect the government's determination to impose stricter rules on taxable persons, especially by incorporating and developing digital processes and biometric verification. This should lead to establishing a more transparent, efficient, and evasion-proof tax system that benefits the government and taxable persons.

Individuals and businesses operating in Pakistan should examine the updated guidelines and determine if and to which extent the changes affect them.

Source: Federal Board of Revenue - Sales Tax Rules

What are the key updates in the 2025 Pakistan Sales Tax Rules?

The key updates include mandatory electronic submission of Form STR-1, biometric verification via NADRA’s e-Sahulat Centre, and new documentation requirements such as bank certificates and GPS-tagged business premises photos.

How can businesses register for sales tax under the updated guidelines?

Businesses must submit Form STR-1 electronically, provide supporting documents like bank account certificates and utility registration numbers, and specify their Regional Tax Office based on their registered address.

What documents are required for sales tax registration in Pakistan?

Applicants need a bank account certificate, registration numbers for gas and electricity connections, business branch details, and GPS-tagged photographs of their premises and equipment.

What is the biometric verification requirement for sales tax registration?

Individuals and representatives must complete biometric verification at NADRA’s e-Sahulat Centre within a month of registration and repeat the process annually in July.

What happens if businesses do not comply with the updated sales tax rules?

Non-compliance may result in the removal of the taxpayer’s name from the Active Taxpayer List, potentially leading to penalties and legal actions.

How do the updated sales tax rules impact businesses operating in multiple locations?

Businesses with multiple locations must provide detailed information about all branches and submit specific registration documents based on their operational scope.