Pakistan to introduce Digital Bill to regulate e-commerce, curb fraud, and tackle cartelisation

Pakistan is set to introduce a ‘Digital Bill’ to regulate digital marketing and e-commerce platforms, aiming to curb cartelisation and protect consumers from fraud, The Express Tribune reported.

The proposed legislation aims to regulate the digital marketing sector, focusing on online platforms. Recent scrutiny of Temu, a Chinese e-commerce platform, by the Competition Commission of Pakistan (CCP) highlighted the need for such regulation. Temu’s aggressive digital marketing strategy, offering higher discounts and risk-free purchases, has been accused of disadvantaging local sellers, leading to concerns of anti-competitive practices.

The Chainstore Association of Pakistan, representing independent retailers, has raised concerns with the CCP over the harm caused by unregulated foreign e-commerce platforms like Temu and Shein. They argue that these platforms distort the local market and harm both consumers and domestic businesses.

The new law will address these issues, including truth-in-advertising rules, mandatory registration of agencies and influencers, data privacy safeguards, and restrictions on deceptive marketing practices. 

Experts believe Pakistan’s digital marketing sector requires a comprehensive regulatory framework to ensure transparency, prevent misleading advertisements, and align with global standards.

At present, misleading advertisements on platforms like Facebook and issues with ‘cash-on-delivery’ payments, where consumers receive incorrect products, are common. The Digital Bill aims to tackle these problems by ensuring better practices in online transactions.

Additionally, there has been a rise in lending apps running misleading ads on social media platforms. The Digital Bill will also address this growing issue.

Experts point to global platforms like Amazon as examples, where accurate product specifications are displayed, and stress that Pakistani e-commerce platforms should follow suit by clearly displaying product details, prices, taxes, delivery timelines, and refund policies.

In a separate development, the Pakistan eCommerce Association (PEA) has urged the government to reduce the tax burden on the e-commerce sector to create a level playing field for local sellers and domestic platforms. 

PEA Chairman Omer Mubeen emphasized that the additional taxes are negatively impacting local businesses, particularly small and medium enterprises (SMEs) and women entrepreneurs, forcing many to shut down.

The government, which imposed an 18% general sales tax (GST) on goods and services purchased online in the fiscal year 2025-26 budget, has also applied additional taxes on non-filers and e-commerce platforms. 

Banks and payment intermediaries are now required to retain buyers’ data for quarterly reporting, while courier services will face penalties for non-compliance with tax collection and documentation standards set by the Federal Board of Revenue (FBR).