The Federal Board of Revenue (FBR) has introduced a new system to improve sales tax collection in Pakistan’s e-commerce sector. Under this initiative, sales tax on digitally ordered goods will be withheld at source by intermediaries.
The responsibility of withholding falls on Payment Intermediaries, Courier Companies, and Online Marketplaces, who act as withholding agents. To assist them, the FBR has issued a comprehensive user manual. The manual provides step-by-step instructions for using the IRIS system, including e-payment creation, PSID and CPR generation, submission of monthly withholding statements, and claiming eligible sales tax credits.
According to the FBR, this system ensures accuracy, consistency, and transparency in sales tax collection. The initiative also empowers stakeholders to meet statutory obligations efficiently and on time.
For Payment Intermediaries and Courier Services, monthly withholding statements will reflect only the payments they handle. These statements are auto-generated from their CPR data, ensuring correct reporting.
Online Marketplaces, however, must submit statements that include all transactions, including those processed through Payment Intermediaries and Courier Services. The marketplaces’ monthly statements are prepared based on the information provided by these intermediaries.
The FBR emphasized that the new system will promote transparency and compliance across the e-commerce sector. Stakeholders will have clear guidance on responsibilities and processes, reducing errors and improving procedural consistency.
The manual is intended for Payment Intermediaries, Courier Companies, Online Marketplaces, and other relevant parties responsible for withholding and reporting sales tax on digitally ordered goods.
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Officials said this initiative is a significant step toward building a well-coordinated e-commerce taxation ecosystem in Pakistan. It highlights the FBR’s focus on modernizing tax collection and ensuring reliable, accurate reporting for the growing digital economy.
