The Government introduces a massive tax on online shopping and e-commerce transactions. FBR is set to impose taxes on digitally ordered goods and services as a separate block of income under section VI-A. These platforms are described as “Prescribed Person” under section 153 of the Income Tax Ordinance and must deduct tax before paying vendors.
A specific tax framework will be established for transactions involving digital platforms, including online marketplaces and courier services, nationwide. Under 165C that every payment intermediary and courier service is responsible for deducting tax. Enforcing strict measures aimed at tightening the tax regime and curbing financial irregularities, FBR has proposed a fiscal budget (2025-26).
By imposing a tax on online shopping or e-commerce transactions, FBR aims to regulate financial irregularities. The new rules introduce advanced tax deductions on digital payments based on the purchase amount. These deductions will directly affect both buyers and sellers in online markets.
For a digital purchase of 10,000, the deduction rate is 1%. While for payments above 10,001 to 20,000, the deduction will be 2%. For a greater amount, such as 20,000, a reduced rate of 0.25% will be applied.
Goods sold through COD platforms will be charged a 0.25% tax will be charged on electronic goods, 2% on clothing and garments, and 1% on all other goods. To ensure a transparent and seamless online business, tax on online shopping in Pakistan will formalize the digital economy.
Online marketplace in Pakistan shall submit a monthly statement containing name, address, Sales Tax and Income Tax registration number of every vendors registered on its platform supplying digitally ordered goods and services in e-commerce, transactional and aggregated quantum of seller’s monthly turnover and the amount deposited into the vendor’s bank account against such sale transactions.
