The federal government is set to introduce strict new conditions for the release of sales tax refunds under the FASTER (Fully Automated Sales Tax e-Refund) system, targeting exporters and other taxpayers who fail to comply with key digital compliance initiatives.
According to sources, the proposed measures will be announced through a formal notification as part of the Budget 2026-27. The move is being described as one of the most significant enforcement actions aimed at ensuring compliance with the Federal Board of Revenue’s (FBR) digital transformation agenda.
Under the new framework, the processing and payment of refunds through the FASTER system will be directly linked to compliance with mandatory digital initiatives, including production monitoring systems, sales tax digital invoicing, and digital eye surveillance systems installed at manufacturing facilities.
Sources revealed that a new risk parameter will be incorporated into the FASTER refund mechanism. The parameter will assess whether exporters and manufacturers have implemented required digital monitoring tools, including electronic production tracking and digital camera systems. The enforcement drive will initially focus on five major export-oriented industries: textiles, leather, surgical goods, carpets, and sports goods.
The proposed restrictions are expected to affect exporters involved in both export activities and domestic sales. Taxpayers failing to meet digital compliance requirements may face delays or suspension of refund payments under the FASTER system.
The FBR has already directed bottled water manufacturers to install electronic production monitoring systems by June 15, 2026. Similar monitoring requirements are already applicable to sectors such as packaged milk, iron and steel, edible oil, and ghee manufacturing, while installation is also underway in textile spinning units.
Officials said that exporters and large taxpayers who do not integrate with sales tax digital invoicing systems or fail to install mandatory production monitoring mechanisms will not qualify for FASTER refunds.
The FASTER system currently disburses approximately Rs30 billion to Rs40 billion in sales tax refunds every month to Pakistan’s leading export sectors. Under the proposed changes, continued access to these refunds will depend on full compliance with the FBR’s digitalization initiatives, making digital invoicing and monitoring systems essential for registered taxpayers seeking timely refund payments.
