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The Federal Board of Revenue (FBR) has announced a cap of Rs. 200,000 on Cash on Delivery (CoD) transactions for e-commerce purchases across Pakistan.
The move, notified through Circular No. 02 of 2025-26 (Income Tax), extends the existing restrictions on large cash payments at retail outlets to digital commerce. The FBR clarified that the measure is consistent with Section 21(s) of the Income Tax Ordinance, 2001, which limits cash-based transactions beyond the prescribed threshold.
Officials said the decision is part of the government’s broader cashless economy strategy, aimed at encouraging the adoption of digital payment methods and reducing reliance on physical cash. By capping CoD orders, the government seeks to increase transparency, curb tax evasion, and improve documentation of the economy.
The Rs. 200,000 ceiling will apply uniformly to all e-commerce platforms operating in Pakistan, regardless of size. Consumers purchasing products above this limit will be required to pay through bank transfers, debit/credit cards, or other approved digital channels.
Industry experts believe the measure could accelerate the shift toward digital payments, though challenges remain in terms of public awareness and trust in online transactions. While urban centers such as Karachi, Lahore, and Islamabad may adapt quickly, adoption could be slower in smaller cities where cash remains dominant.
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Nevertheless, officials argue that the policy will help streamline payment processes and strengthen financial compliance across the e-commerce sector. The FBR has urged businesses and consumers alike to prepare for the transition, stressing that digitalization is essential for sustainable economic growth.
