In a sweeping move to regulate the digital economy, the Federal Board of Revenue (FBR) has enforced strict tax compliance on the e-commerce sector, making registration mandatory for all online sellers.
Under the new policy, unregistered digital vendors are banned from operating, with banks, courier companies, and online marketplaces directed to immediately suspend services to them. Selling online without FBR registration in Pakistan is now officially illegal.
Key updates include:
- 1% tax on all digital transactions via banks, fintechs, or payment gateways.
- 2% tax on cash-on-delivery (COD) orders, to be deducted upfront by courier companies.
This enforcement falls under Sections 6A and 153(2A) of the Income Tax Ordinance and mandates that marketplaces, apps, and delivery services must stop servicing unregistered sellers. Violators face fines, audits, and shutdowns. Courier firms are now responsible for tax deductions, transaction reporting, and monthly filings.
Under Section 3(7A), online sales tax will now be final for small sellers, eliminating input tax credit options.
Even international e-commerce businesses targeting Pakistani buyers must now register under Sections 14(1A) and 14(1B).
Platforms and payment processors are also required to file monthly tax reports detailing every transaction and seller.
Experts consider this the FBR’s toughest initiative yet to bring the booming e-commerce market into the tax net — a move expected to either formalize the sector or create serious disruptions for unprepared small businesses.
For more details about sales tax and exise return, read FBR Extends Deadline for Submitting Sales Tax and Federal Excise Returns
