Carriers/transport operators: FBR to conduct 3rd-party audit of tracking services
ISLAMABAD: The Federal Board of Revenue (FBR) will conduct third party audit of tracking services provided by carriers or transport operators. The FBR has issued an SRO 71(I) 2025 to notify draft amendment in the Customs Rules, 2001 here on Tuesday.
Previously, the FBR had notified the draft rules as per SRO 161 (1)2025. According to the notification, the Project Director shall arrange to carry out third party audit of the system annually and periodical third party monitoring of tracking services. The third party audit report shall be used for system related improvements and corrective and remedial actions, where warranted.
Previously, the Project Director shall arrange to carry out audit of the system every year. The report shall be used for system related improvements and corrective and remedial actions, where warranted.
Now, the condition of third party audit and monitoring of tracking services has been specified in the Customs Rules.
Copyright Business Recorder, 2025
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
an hour ago
- Express Tribune
FBR to get powers akin to SHO; 18% sales tax on e-commerce transactions proposed
Over last few years, market size of e-commerce has enhanced significantly in Pakistan. PHOTO: FILE Listen to article The federal budget for fiscal year 2025-26 has proposed a significant expansion of the Federal Board of Revenue (FBR) powers, including introducing strict enforcement measures aimed at tightening the tax regime and curbing financial irregularities. According to official sources, the FBR has been granted powers akin to those of a Station House Officer (SHO), enabling it to conduct inspections of chartered accountancy and audit firms involved in preparing income tax returns if discrepancies are suspected in taxpayers' declarations. This will give FBR officers the ability to directly oversee these firms to ensure compliance with tax laws. Those intending to purchase vehicles or immovable property will be required to prove that the declared value of the asset is within 130% of their income as declared in the previous year's tax return. Buyers will be required to submit a formal application to the FBR confirming the availability of funds — either in their own name or that of their spouse or children — and that these were duly declared in their wealth statements. Read: Finance minister unveils anti-digital, pro-realty sector budget The proposed legislation also authorises the FBR to share taxpayers' data with commercial banks, enabling them to cross-check deposit and investment activity with declared income. In cases where financial transactions do not reconcile with tax returns, banks will be obligated to report such customers to the FBR, which will be empowered to initiate enforcement action. Moreover, the FBR will now have the authority to close unregistered bank accounts. Previously, it could only freeze accounts for tax recovery purposes. Under the new law, operating an unregistered bank account will not be permitted, and banks will be required to comply with FBR directives in this regard. The proposed amendments to Section 58C of the Income Tax Ordinance further empower the FBR to access offices of tax advisers and firms responsible for filing returns where discrepancies are suspected. The intent is to verify the basis on which financial records and returns have been prepared. Also Read: Defence budget hiked by 20.2% to Rs2,550b The definition of sales tax fraud has also been expanded. Under the proposed changes, any person or entity found to be aiding or abetting in tax fraud will be subject to legal prosecution. This includes tax lawyers, consultants, chartered accountants, and firms involved in filing returns, refund claims, or input tax adjustments. Such individuals and firms could also face arrest and prosecution under the new law. The bill also proposes that the FBR be granted the authority to physically monitor the movement of goods, including sugar and other commodities, through an enhanced cargo tracking system. This will ensure that commodities like sugar are being tracked accurately and are in compliance with tax regulations. In a move likely to impact online shoppers, the Finance Bill seeks to impose an 18% sales tax on all e-commerce transactions. Payment collection entities — such as courier companies and banks processing credit and debit card payments — will be designated as withholding agents, responsible for collecting and depositing the tax at the time of delivery. This will significantly increase the cost of online shopping for consumers. Read More: Non-filers to be barred from purchasing vehicles, immovable property The Finance Bill also mandates digital and social media platforms, including YouTube, Facebook, TikTok, Instagram, Twitter, and freelancing sites, to submit advertising revenue details to FBR every quarter. Platforms that fail to comply will face strict action, including blocking of remittances abroad through the State Bank of Pakistan. This move will provide the FBR with more oversight on the advertising revenue being generated through digital platforms and improve tax collection in the digital space. The proposed changes are part of the government's wider efforts to tackle tax evasion and increase tax compliance, particularly in the rapidly growing digital economy.
Business Recorder
5 hours ago
- Business Recorder
Taxing the digital frontier: Pakistan's bold move to tap e-commerce and online revenues
In a landmark shift to modernize tax collection and close long-standing loopholes, Pakistan's 2025–26 federal budget introduces the Digital Presence Proceeds Tax Act, 2025 – a targeted move to tax revenues generated by foreign digital platforms and online vendors operating in Pakistan without a physical presence. Part of this act is the digital transactions proceeds levy - a 5% withholding levy that will be applied to payments made to domestic and international digital vendors (e.g., Amazon, Google, Facebook, Netflix, Daraz, Temu, PakWheels) for goods or services delivered to Pakistani consumers. The levy will apply to both physical and digital goods/services, including streaming, cloud computing, e‑learning, consultancy, online banking, architectural design, and other digitally delivered services As per earlier reports, banks, fintech firms, and payment gateways are mandated to deduct the 5% at source when money is transferred to vendors, and must report these deductions quarterly to the FBR. Platforms qualify for the levy if they generate more than Rs 1 million annually from Pakistani users, or have a 'significant digital footprint'. Separately, a new standard VAT is being proposed for online marketplaces facilitating the sale of both goods and services (e.g., Daraz, OLX, Zameen, PakWheels) which aims to standardize tax treatment and close revenue gaps—especially for platforms acting as intermediaries. This will be collected by the logistics firms delivering the goods. A key part of the budget is its focus on e-commerce platforms using cash-on-delivery (COD), a popular but loosely regulated channel. Foreign vendors relying on COD logistics to reach Pakistani buyers will no longer remain invisible to tax authorities. Their proceeds will now be within the tax net, aligning their obligations with those of domestic businesses. The budget also introduces enforcement mechanisms such as track-and-trace systems, barcodes, and tax stamps to ensure compliance. By leveraging technology and data, the FBR aims to build capacity to monitor digital transactions and enforce this new regime effectively. Significance of the law The new law marks a critical step toward recognizing the realities of the modern economy, where global tech giants and cross-border sellers reap substantial revenues from Pakistani consumers but contribute little to the national tax base. By establishing 'digital presence' as a taxable nexus, the government aims to impose a Digital Services Tax (DST) on companies earning income through digital channels – be it through apps, marketplaces, streaming services, or cloud-based software. In a global context, Pakistan joins countries like India, the UK, and members of the EU that have already implemented digital taxation policies to claim their fair share from the borderless digital economy. While the OECD continues to negotiate a unified global tax framework, unilateral measures like this are increasingly seen as essential tools for emerging economies struggling with revenue shortfalls. However, the law's success will depend on the implementation capacity of tax authorities, coordination with financial and logistics intermediaries, and the willingness of global platforms to comply – or face potential restrictions.
Business Recorder
6 hours ago
- Business Recorder
Govt unveils ambitious digital overhaul for FBR in Budget 2025–26
The Federal Board of Revenue (FBR) is set to undergo a sweeping digital transformation as part of the government's strategy to modernise Pakistan's tax administration and improve revenue collection, according to the federal budget speech presented by Finance Minister Muhammad Aurangzeb for FY2025–26 on Tuesday. Aurangzeb presented the federal budget for the second time as the coalition government sought to revive the economy, meet the International Monetary Fund (IMF) benchmarks and provide some relief to the tax-weary masses. FBR Tax Target The Federal Board of Revenue (FBR) is assigned to collect Rs14.13 trillion in FY26, up 19% as compared to Rs11.9 trillion revised estimates for FY25. The tax collection for FY26 includes Rs6.9 trillion in direct taxes and Rs7.2 trillion in indirect taxes. Key components of the transformation The reform plan includes a nationwide rollout of Digital Production Tracking, aimed at monitoring manufacturing output and linking it with digital invoicing systems. This move is expected to reduce underreporting of production and ensure greater documentation of business activity. To further strengthen documentation, the FBR is expanding business-to-business (B2B) e-Invoicing, making it mandatory across multiple sectors. The plan also includes deeper integration of the Point of Sale (POS) system for retailers and the deployment of an E-way Billing framework to digitally track the movement of goods. In a significant shift away from traditional audit practices, the FBR will fully implement Faceless Audit and Faceless Customs Audit systems. These aim to eliminate human discretion in audit processes, reduce corruption, and improve taxpayer confidence. Technology-led enforcement Artificial Intelligence (AI) will be used for risk-based audit selection, while fraud analytics tools will support customs enforcement and refund scrutiny. A Central Control Unit is being established to provide real-time visibility and centralised oversight across all enforcement and compliance operations. Workflow digitisation is also being prioritised, with automated alerts and a digital case management system intended to expedite processing and enforcement without bureaucratic delays. Institutional support and capacity building The transformation will be supported by the PRAL Board, which will oversee IT governance and system upgrades. Additionally, the government plans to introduce 'Audit Mentors' within the FBR to guide staff through the transition and promote digital literacy. According to budget documents, these reforms are not only targeted at boosting the tax-to-GDP ratio – currently one of the lowest in the region – but also at aligning Pakistan's tax administration with global best practices. What this means for taxpayers For taxpayers and businesses, the FBR's digital push signals a future of increased compliance obligations but potentially fewer bureaucratic hurdles. E-invoicing, production tracking, and centralised audits will make non-compliance harder and speed up legitimate processing. The government's digital transformation agenda is expected to gain traction over the fiscal year, with multiple milestones scheduled for rollout through FY2026.
