PCDA Seeks Exemption and Phased Implementation of Electronic Invoice Rule

KARACHI: The Pakistan Chemists & Druggists Association (PCDA) has requested the Federal Board of Revenue (FBR) to allow an exception and implement SRO 709(I)/2025 in stages. This regulation mandates real-time electronic invoice integration for all non-corporate registered businesses starting June 1, 2025.

In a formal communication to the FBR Chairman, PCDA Chairman Abdul Samad Bhudhani articulated the substantial operational and fiscal challenges the mandate would place on pharmaceutical distributors, especially the small to medium-sized enterprises (SMEs) that constitute over 80% of the industry.

“While we are supportive of FBR’s digitization efforts, the existing timeframe and uniform application of the directive are neither practical nor sustainable,” the letter conveyed. Bhudhani highlighted that pharmaceutical distribution involves high volumes and low margins. Most businesses handle between 15,000 and 25,000 invoices monthly and serve numerous pharmacies nationwide, including those in remote areas with limited digital resources.

The PCDA pointed out that numerous non-corporate distributors lack the necessary technical skills, IT infrastructure, or financial resources to adhere to real-time invoice integration. This system requires immediate connectivity, synchronization, and validation of each sale with the FBR’s central database.

Referencing international practices, the PCDA mentioned guidelines from Bangladesh and the OECD, where such measures are introduced gradually, initially focusing on larger entities. These rollouts are supported by cost-benefit analyses and engagement with relevant parties.

Key Recommendations by PCDA:
  • Immediate exclusion from SRO 709(I)/2025 for non-corporate pharmaceutical importers, distributors, and wholesalers.
  • Gradual implementation, starting with corporate entities or those exceeding a set annual turnover (e.g., Rs. 500 million), followed by others over 12–18 months.
  • Initiation of an industry-wide assessment of digital readiness and a pilot program to assess real-time invoicing systems within the pharmaceutical sector.
  • Creation of a joint task force comprising PCDA, FBR, and FPCCI representatives to formulate realistic and sector-specific implementation strategies.

Bhudhani cautioned that an ill-prepared enforcement of this policy could disrupt the supply of medicines, force small businesses to close, and increase non-compliance. These outcomes would contradict the policy’s objectives.

He urged the FBR to take into account the specific circumstances of the pharmaceutical sector and adopt a cooperative approach to ensure effective reform.