The Federal Board of Revenue (FBR) Chairman, Rashid Mahmood Langrial, clarified on Monday that one-time sellers and women selling goods from their homes will be exempt from mandatory registration under the new e-commerce tax rules.
This clarification was made during a meeting of the Senate Standing Committee on Finance and Revenue, which reviewed the federal budget presented last week.
The committee approved the proposal to impose sales tax on e-commerce transactions, while recommending a reduction in the sales tax on stationery items from 10% to zero.Â
Chairman FBR said that sales tax is already collected from consumers in e-commerce transactions, but is often not remitted to the FBR. He further explained that courier services would now be designated as collection agents since they hold the seller’s invoice.
However, the FBR Chairman assured committee members that local services would not be subject to sales tax. The government’s plan also includes mandatory registration for all digital vendors, including foreign e-commerce companies selling goods to Pakistani customers.
The Finance Bill 2025-26 stipulates that all digital vendors, including foreign businesses, must register in Pakistan if they sell goods digitally through online marketplaces, websites, or apps. The committee also reviewed new registration laws for anyone selling goods online to Pakistani consumers.
E-commerce businesses will now face taxes ranging from 0.25% to 5%. The new tax applies to digital services provided by both local and foreign vendors. Foreign vendors with a digital presence in Pakistan will be charged a 5% tax on digitally ordered goods and services, whether delivered digitally or physically. Banks will be required to deduct this 5% tax from payments made to these vendors.
On local e-commerce platforms, the government has proposed a tiered tax structure. A 1% tax will apply to transactions where the amount does not exceed Rs 10,000. A 2% tax will be imposed on transactions under Rs25,000, and any amount above Rs25,000 will be taxed at a reduced rate of 0.25%.
Additionally, courier services involved in cash-on-delivery (CoD) transactions will be subject to new taxes. The government has proposed a tax rate of 0.25% on electronics and electrical goods, 2% on clothing articles, and 1% on other goods. These taxes will be collected by courier services when goods are delivered and paid for via CoD.
Furthermore, the new tax regime requires all online marketplaces, payment intermediaries, and courier service providers to file detailed statements with the Commissioner, sharing data of sellers involved in digitally ordered goods and digitally delivered services. This is intended to ensure transparency and improve tax collection from the e-commerce sector.
The government has also proposed a set of penalties to encourage compliance. Online marketplaces that allow unregistered vendors to use their platform will face a fine of Rs1 million. Furthermore, banks, payment gateways, and courier services that fail to deduct or remit the appropriate taxes will be liable to pay a fine equal to 100% of the tax involved in the transaction.
The committee raised concerns about the impact of these regulations on small and one-time online sellers, such as housewives running businesses from home. Langrial reassured members that such individuals would not be required to register.
In discussions on sales tax provisions within the Finance Bill, the committee also proposed significant reforms. One of the major recommendations was reducing the sales tax on stationery items to zero, following concerns raised by the Stationery Association.
The session was attended by key officials, including Federal Minister for Finance Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiyani, Chairman of the Federal Board of Revenue (FBR) Rashid Mahmood Langrial, and senior officials from relevant departments.
