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In a move to regulate the booming e-commerce industry, the government has proposed a new tax on online shopping in Pakistan, targeting goods and services ordered digitally.
For the first time, there will be a specific tax framework for transactions involving digital platforms, including online marketplaces and courier services across the country.
These platforms will now be classified as “prescribed persons” under section 153 of the Income Tax Ordinance and must deduct tax before paying vendors.
The new rules introduce advance tax deductions on digital payments based on the purchase amount. These deductions will directly affect both buyers and sellers in online markets.
If the amount paid digitally is under Rs. 10,000, the deduction rate is 1%. For amounts between Rs. 10,001 and Rs. 20,000, the rate is 2%.
READ: Govt imposes 18pc sales tax on all petrol, diesel & Electric Vehicles
For digital payments over Rs. 20,000, a reduced rate of 0.25% will apply, likely as an incentive to promote higher-value online purchases via digital means.
The policy also covers cash on delivery transactions, introducing three different rates based on the type of product delivered to the customer.
A 0.25% tax will be charged on electronic goods, 2% on clothing and garments, and 1% on all other goods sold through COD platforms.
The government says the tax on online shopping in Pakistan will increase transparency and bring informal online businesses into the tax net.
Experts believe these new tax rules may raise online shopping costs but could also help formalize the digital economy, meanwhile, the Federal Board of Revenue (FBR) will oversee enforcement.
