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Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. •
Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. • Profits on debt from mutual funds deriving 50% or more income from debt carry a huge 50% tax for Non-Filers, compared to 25% for Filers. • Importing pharmaceutical products carries an 8% tax for Non-Filers, which is exactly double the 4% rate applied to Active Taxpayers. • The withholding tax on banking and financial institution profits is set at 20% for those on the Active Taxpayers’ List, but jumps to 40% for those off the list. • Purchasing a 1601cc to 1800cc vehicle will cost Non-Filers a 9% tax, which is three times the 3% rate given to Active Filers. • Winning a raffle, lottery, or sales promotion prize costs Non-Filers a whopping 40% in tax, compared to 20% for Filers. • Importing basic goods from Part-I of the Twelfth Schedule costs Active Taxpayers just 1% in tax, while Non-Filers have to pay 2%. • Companies generating rental income from immovable property pay a 15% tax if they are Active Filers, but face a 30% rate as Non-Filers. • If you receive dividends from Independent Power Purchasers (IPPs), Filers pay a 7.5% tax while Non-Filers surrender 15%. • Registering a 1000cc motor vehicle costs Filers just 1% in tax, while Non-Filers are penalized with a 3% tax. • Registering a 2001cc to 2500cc luxury vehicle incurs a 7% tax for Active Filers, but a staggering 21% tax for Non-Filers. • Active Filers importing CKD kits for Electric Vehicles pay a minimal 1% tax, whereas Non-Filers pay double at 2%. • Selling rice, cotton seed, or edible oils comes with a low 1.5% tax for Filers, but a 3% tax for Non-Filers. • Providing IT and IT-enabled services costs Active Taxpayers just 4% in withholding tax, while Non-Filers must pay 8%. • Commercial importers bringing in Part-III items are hit with a 12% tax rate if they are Non-Filers, compared to only 6% for Active Filers. • Buyers of 1301cc to 1600cc cars pay a 2% advance tax if they are Filers, but Non-Filers pay exactly triple at 6%. • Cash withdrawals by a person whose name does not appear on the Active Taxpayers’ List are hit with an automatic 0.8% advance tax. • Buying a high-end 2501cc to 3000cc vehicle leaves Filers with a 9% tax bill, but absolutely punishes Non-Filers with a massive 27% tax rate. • Payments made to non-resident sportspersons incur a 15% tax if they are on the ATL, and a massive 30% if they are non-ATL. • Capital gains arising on the disposal of certain debt securities are taxed at 15% for Filers, but double to 30% for Non-Filers. • The sale of petroleum products is taxed at 12% for Filers and exactly double that at 24% for Non-Filers. • Winning a prize bond or crossword puzzle means you lose 15% to taxes as an Active Filer, but a massive 30% if you are a Non-Filer. • Payments to electronic and print media for advertising services are taxed at just 1.5% for Active Taxpayers, compared to 3% for Non-Filers. • Salaries under Rs. 600,000 are completely tax-free, maintaining a 0% rate regardless of your taxpayer status. • Commercial importers of Part-II goods face a 3.5% withholding tax if they are Filers, but the rate doubles to 7% for Non-Filers. • Dividends from Real Estate Investment Trusts (REITs) and general companies cost Active Filers 15% in tax, but Non-Filers lose a massive 30%. • Pensions under 10 million rupees remain 100% tax-exempt for everyone, no matter what your filing status is. •
E-commerce Tax Regime in Pakistan 2025: Withholding Tax on Digital and Cash Transactions
From July 1, 2025, Pakistan has introduced a new e-commerce tax regime with differentiated withholding rates for digital payments and Cash on Delivery (CoD). Here’s a breakdown of the rules, compliance requirements, and penalties.
Starting July 1, 2025, the Government of Pakistan has rolled out a new Withholding Tax (WHT) regime targeting e-commerce transactions conducted within the country. This regime applies to sellers of both physical and digital goods or services, provided that payments are made through local channels and deliveries occur inside Pakistan. By introducing these rules, the government aims to regulate online commerce, expand the tax net, and encourage the adoption of digital payments over cash transactions.
I. Overview of the E-commerce Tax Regime
Purpose: To regulate and tax e-commerce transactions in Pakistan, register online sellers, assign NTNs, and ensure tax collection through a withholding mechanism.
Enabling Legislation: Income Tax Ordinance, 2001 updated by Finance Act, 2025.
Scope: Applies to the sale or purchase of goods and services over computer networks using digital ordering features within Pakistan.
II. Key Definitions
E-commerce: Refers to the sale or purchase of goods and services conducted over computer networks, using methods specifically designed for receiving or placing orders through websites, mobile applications, or online marketplaces that have digital ordering features, utilizing devices like mobile phones, iPads, Tablets, or automated computer-to-computer ordering systems.
Online Marketplace (OMP): Online interfaces that facilitate direct interaction between multiple buyers and multiple sellers through digital orders for the supply of goods, regardless of whether the platform takes economic ownership of the goods being sold.
Payment Intermediary: Includes banking companies, financial institutions (such as licensed foreign exchange companies), or payment gateways that facilitate the transfer of funds or payment instructions between two or more persons.
Courier Service: A person providing delivery services for goods, including logistic and ride-hailing services, and collecting cash on behalf of a seller.
III. Income Tax Provisions (Section 6A of Income Tax Ordinance, 2001)
A tax is imposed under Section 6A of the Income Tax Ordinance, 2001, on every person who receives payment for the supply of digitally ordered goods or services delivered from within Pakistan using locally operated online platforms, including online marketplaces or websites.
The tax collected under this scheme is considered a final tax on the income derived by the seller from local e-commerce transactions.
Export proceeds that are already subject to withholding tax under sections 154 and 154A of the Ordinance do not fall within the ambit of this Section 6A regime.
Payment Intermediary: Responsible for collecting tax at the rate of 1% of the gross amount of receipts when payments for digitally ordered goods or services are made through digital means or banking channels.
Courier Service: Responsible for collecting tax at the rate of 2% of the gross amount of receipts when payments for digitally ordered goods or services are made on a Cash on Delivery (CoD) basis.
In cases where vendors use e-stores and similar mobile applications for online payments, the acquiring bank acts as the payment intermediary responsible for tax collection. If payment is made through an Online Market Place, the bank or financial institution settling the payment between the vendor and buyer is the payment intermediary.
This differential tax rate is intended to encourage the use of digital payment methods to promote a cashless economy.
IV. Sales Tax Provisions
Withholding Agents & Rates:Payment Intermediaries and Couriers: Required to collect sales tax at 2% of the gross value of supplies for digitally ordered goods from within Pakistan via online marketplaces, websites, or software applications.
Liability: For OMP supplies of taxable goods, the payment intermediary (digital) or courier (CoD) is responsible for collection at Eleventh Schedule rates.
Final Discharge of Liability: Tax withheld by these agents serves as a final discharge for taxable supplies from cottage industries and non-Tier-I retailers.
V. Obligations of Withholding Agents and Online Marketplaces
Tax Collection and Deposit: Payment intermediaries and courier services must collect tax in the name of each seller and deposit it in the Federal Government treasury on a monthly basis.
Statement Filing (Income Tax):
Payment intermediaries and courier services are required to file a prescribed quarterly withholding statement to the Commissioner. This statement must include the seller’s name, identification number (NTN/CNIC), address, transaction date, unique identifier (invoice number), total transaction value, and the total amount of tax deducted.
They must also file an annual withholding statement for the relevant tax year within thirty days of the year’s end.
Statement Filing (Online Marketplaces – Income Tax): Every online marketplace in Pakistan must submit a monthly statement. This statement should contain the name, address, Sales Tax and Income Tax registration number of every vendor registered on its platform, the transactional and aggregated quantum of the seller’s monthly turnover, and the amount deposited into the vendor’s bank account against such sale transactions.
Electronic Invoicing (Sales Tax Rules): For online sales, including those via online marketplaces, the integrated person must register their website, software, and mobile application with the Board’s Computerised System to record auto-electronic invoices. These electronic invoices should include details such as the FBR Fiscal Invoice Number and sales tax withheld at source.
VI. Registration Requirements
Sellers: Every person, including those selling digitally ordered goods or services from within Pakistan using an online marketplace or a courier service, must apply for registration under the Income Tax Ordinance in the prescribed form and manner.
Online Marketplaces and Courier Services: These entities are prohibited from allowing any vendor to use their platform services to carry out e-commerce transactions unless such vendors are registered under the Income Tax Ordinance. Similarly, for sales tax purposes, they cannot allow any unregistered person to use their services for e-commerce transactions if that person is required to be registered.
Sales Tax Registration: Every person (excluding cottage industries and retailers paying sales tax via electricity bills) selling digitally ordered goods from within Pakistan through an online marketplace, website, or software application must apply for sales tax registration in the prescribed manner.
VII. Penalties for Non-Compliance
Failure to Deduct/Pay Tax: A banking company, payment gateway, or courier service that fails to deduct tax or pay the tax deducted for digitally ordered goods or services on an e-commerce platform will face a penalty equal to 100% of the amount of tax involved.
Failure of Seller to Register: Any seller supplying digitally ordered goods and services through an online marketplace who is required to register under the Income Tax Ordinance but fails to do so will incur a penalty of five hundred thousand rupees for the first default and one million rupees for every subsequent default.
Allowing Unregistered Persons: An online marketplace or courier that allows unregistered persons to use its services for e-commerce transactions will be liable for a penalty of five hundred thousand rupees for the first default, one million rupees for the second default, and 100% of the tax loss plus default surcharge for each subsequent default within a year.
Tampering with System/Contravention of Rules: An integrated person found to have tampered with the system or made sales in a manner not prescribed under the rules, or who contravenes any provisions of the e-invoicing chapter, will be subject to penalties.
VIII. Customs Exemption
Prevention of Double Taxation: Collector of Customs will not collect advance tax under Section 148 (Imports) if the recipient is already liable under the Digital Presence Proceeds Tax, Act, 2025, and tax has been collected by a payment intermediary.
FAQs: Pakistan’s E-commerce Tax Regime
What is the primary objective of Pakistan’s e-commerce tax regime introduced by the Finance Act, 2025?
The primary objective of Pakistan’s e-commerce tax regime is to register online sellers, assign them National Tax Numbers (NTNs), and ensure the collection of tax on digitally ordered transactions through a workable withholding tax mechanism. This aims to bring e-commerce activities into the formal tax net.
Define “E-commerce” according to the provided text.
E-commerce refers to the sale or purchase of goods and services conducted over computer networks. It specifically involves methods designed for receiving or placing orders through websites, mobile applications, or online marketplaces that feature digital ordering capabilities, using devices like mobile phones or automated computer-to-computer systems.
Under which section of the Income Tax Ordinance, 2001, is the tax on e-commerce transactions imposed, and what is the nature of this tax?
The tax on e-commerce transactions is imposed under Section 6A of the Income Tax Ordinance, 2001. The tax collected under this scheme is considered a final tax on the income derived by the seller from local e-commerce transactions.
Explain the differential tax rates for income tax collection by a Payment Intermediary versus a Courier Service, and the reason behind this difference.
Payment Intermediaries collect income tax at 1% of gross receipts for digital payments, while Courier Services collect at 2% for Cash on Delivery (CoD) payments. This differential rate is intentionally set higher for CoD to encourage the adoption and use of digital payment methods, promoting a cashless economy.
What are the sales tax collection responsibilities of Payment Intermediaries and Couriers, and for whom does this collected tax serve as a final discharge?
Payment Intermediaries and Couriers are required to collect sales tax at 2% of the gross value of supplies for digitally ordered goods. This tax, when withheld, serves as a final discharge of tax liability for taxable supplies of digitally ordered goods from cottage industries and retailers other than Tier-I retailers.
List two key types of statements that Payment Intermediaries and Courier Services must file regarding income tax.
Payment Intermediaries and Courier Services must file a prescribed quarterly withholding statement to the Commissioner, detailing seller and transaction information. Additionally, they are required to file an annual withholding statement for the relevant tax year within thirty days of the year’s end.
What specific information must an Online Marketplace in Pakistan include in its monthly statement?
An Online Marketplace in Pakistan must include the name, address, and Sales Tax and Income Tax registration number of every vendor registered on its platform in its monthly statement. It must also report the transactional and aggregated quantum of the seller’s monthly turnover and the amount deposited into the vendor’s bank account against such sales.
Describe the registration requirements for sellers operating through online marketplaces or courier services under the Income Tax Ordinance.
Every person selling digitally ordered goods or services from within Pakistan using an online marketplace or courier service must apply for registration under the Income Tax Ordinance in the prescribed form and manner. This ensures they are properly identified for tax purposes within the e-commerce ecosystem.
What is the penalty for an online marketplace or courier service that allows unregistered persons to use its services for e-commerce transactions for a second default?
For a second default, an online marketplace or courier service that allows unregistered persons to use its services for e-commerce transactions will be liable for a penalty of one million rupees. This is a significant increase from the first default penalty to deter repeated non-compliance.
How does the Customs Exemption provision prevent double taxation in certain e-commerce transactions involving imports?
The Customs Exemption prevents double taxation by stating that the Collector of Customs will not collect advance tax under Section 148 (Imports) if the recipient of the goods is already liable under the Digital Presence Proceeds Tax, Act, 2025, and the tax has been collected by a payment intermediary. This ensures tax is only collected once on imported e-commerce goods.
Write for Us
Interested in contributing to our platform? We welcome writers, researchers, and professionals to share their insights on Pakistan’s e-commerce tax regime. If you’d like to write for us, visit our Write for Us page and submit your ideas on the following topics:
Analyze the rationale behind the differentiated income tax withholding rates for digital payments versus Cash on Delivery (CoD) payments in Pakistan’s e-commerce regime. Discuss how this policy aims to influence market behavior and achieve broader economic goals.
Critically evaluate the various obligations placed on Online Marketplaces regarding statement filing and vendor registration. How do these obligations contribute to the overall effectiveness and transparency of the e-commerce tax regime?
Compare and contrast the income tax and sales tax provisions for e-commerce transactions, specifically focusing on the roles of Payment Intermediaries and Courier Services as withholding agents. Discuss any similarities or differences in their liabilities and the finality of the tax collected.
Discuss the range of penalties for non-compliance within Pakistan’s e-commerce tax regime, covering sellers, online marketplaces, and withholding agents. To what extent do these penalties seem appropriate for deterring various forms of non-compliance?
Explain how Pakistan’s e-commerce tax regime, through its definitions, withholding mechanisms, and registration requirements, attempts to formalize and bring into the tax net a sector that traditionally faced challenges in tax collection.
If you have expertise in taxation, law, or digital commerce, we’d love to hear from you!
Glossary of Key Terms
Cash on Delivery (CoD): A payment method where the recipient pays for goods at the time of delivery.
Cottage Industries: Small-scale, often home-based, manufacturing units that may be subject to different tax regulations or exemptions.
Courier Service: A person or entity providing delivery services for goods, including logistics and ride-hailing, often collecting cash on behalf of a seller.
Digital Presence Proceeds Tax, Act, 2025: A specific tax act mentioned in the context of customs exemption, indicating a broader framework for taxing digital activities.
Digitally Ordered Goods or Services: Goods or services purchased or sold through computer networks using specific digital ordering features (e.g., websites, mobile apps).
E-commerce: The sale or purchase of goods and services conducted over computer networks using methods specifically designed for receiving or placing digital orders.
Eleventh Schedule of the Sales Tax Act, 1990: A specific schedule within the Sales Tax Act that outlines rates and rules for sales tax, particularly referenced for digitally ordered goods.
Export Proceeds: Income generated from the sale of goods or services to international buyers.
FBR Fiscal Invoice Number: A unique identification number assigned by the Federal Board of Revenue to electronic invoices, ensuring their authenticity and tracking.
Federal Government Treasury: The central government’s account where taxes and other revenues are deposited.
Final Tax: A tax where the amount withheld or paid at the source is considered the full and final tax liability of the recipient, with no further assessment required.
Finance Act, 2025: The legislative act that introduced the specific tax regime for e-commerce transactions in Pakistan.
Gross Amount of Receipts: The total amount of money received from sales or services before any deductions or expenses.
Income Tax Ordinance, 2001: The primary law governing income tax in Pakistan, under which Section 6A (e-commerce tax) is introduced.
Integrated Person: A person or entity whose system (e.g., website, software, mobile application) is registered and integrated with the Board’s Computerised System for electronic invoicing.
National Tax Number (NTN): A unique identification number issued by the tax authorities to individuals and businesses for income tax purposes.
Online Marketplace (OMP): Digital interfaces that facilitate direct interaction between multiple buyers and multiple sellers for the supply of goods through digital orders.
Payment Intermediary: An entity, such as a banking company, financial institution, or payment gateway, that facilitates the transfer of funds or payment instructions.
Sales Tax Act, 1990: The primary law governing sales tax in Pakistan.
Section 6A (Income Tax Ordinance, 2001): The specific section of the Income Tax Ordinance that imposes tax on e-commerce transactions in Pakistan.
Section 148 (Imports) (Income Tax Ordinance, 2001): A section of the Income Tax Ordinance related to advance tax collected on imported goods.
Sections 154 and 154A (Income Tax Ordinance, 2001): Sections of the Income Tax Ordinance pertaining to withholding tax on export proceeds.
Tax Year: The accounting period (usually 12 months) for which taxes are calculated.
Tier-I Retailers: A category of retailers typically defined by specific criteria (e.g., turnover, shop size) who are subject to a different sales tax regime compared to other retailers.
Withholding Agent: An entity legally required to deduct tax at the source from payments made to another party and remit it to the tax authorities.
Final Words
This new WHT framework marks a transformative step in Pakistan’s tax system, aiming to formalize the rapidly growing e-commerce sector and ensure fair taxation on digital transactions. While it brings new compliance obligations for sellers, payment intermediaries, and online marketplaces, it also provides clarity and transparency for the future of digital trade in Pakistan.
If you are a seller, freelancer, or service provider, it is crucial to understand these changes and adjust your compliance strategy accordingly. And if you are still unsure how these rules apply to your business, you can Ask TaxationPk for professional guidance.
An aspiring Chartered Accountant with a growing footprint in Pakistan’s tax education and digital finance content landscape. Currently, I work as the Editor-in-Chief at TaxationPk, where I lead content strategy, quality control, and editorial planning for tax-related blogs, news articles, and social media outreach.
Hi i want to know courier companies are asking us to provide registered Business name,NTN and STRN, On social media e-commerce influencers are saying if your sale is equal to 8 millions annually than you have to register for STRN otherwise we can skip it, is it true?
Impressive approach. Courier companies are asking for NTN as it is required now and you cannot sell if not registered with FBR. They’re asking for your STRN because if you’re already registered they will not deduct GST of 2%, as in case if you’re registered then you’re liable for 18%. These new rules are explained in our publication about the New 2% Sales Tax on Online Goods. As per your 2nd part about some social media influencers, Maybe they’ve accurate and latest updates which we haven’t yet found or received as the law is newly introduced and notifications might come sooner from FBR clarifying all these. As of now the GST on online goods is 2% who are not required to register for STRN (all the online seller except manufacturers, retailers having shops in big malls, wholesellers, distributors etc).
Hello
I have a question, since courier companies are charging 2% sales tax and 2% income tax on our COD amount. Is registration in sales tax is compulsory now for all e-commerce brands?
And if registration in sales tax is compulsory, after registration how much sales tax e-commerce brands needs to pay to fbr, is it 2% or 18%
Section 14 of the Sales Tax Act has been expanded through sub-sections 1A and 1B, making it mandatory registration for any person selling digitally. They will apply 2% for digital while 18% for physical or other reduced rates for different products and services.
Dear Sir, Kindly explain about sales tax on e-commerce transaction in Pakistan, Courier companies start deducting 2 % sales tax on behalf of their customer on each receipts collected. Is sales tax applicable on e-commerce transactions or not?
Dear Sir,
So for my store which selling Accessories like sunglasses, jewellery etc what should we do should we register for GST right away what are compliance after registration. (Already Registered NTN on personal).
How much should we be charging customers in terms of Sales Tax?
Is there any threshold for registration as our volume is very low as of now.
Any exemption for Women?
Small retailers or sellers doesn’t need to get register for GST. 2% will be deducted as GST from their sales which will charge to customer. However, if you register for GST then you will collect 18% of GST on your own from customer and COD will not withhold your GST.
Good work bro
Appreciate the clarity around the WHT scope. One concern is how small e-commerce sellers will manage compliance—do you think the FBR might introduce simplified procedures or thresholds to ease the burden on micro-entrepreneurs?
Hi i want to know courier companies are asking us to provide registered Business name,NTN and STRN, On social media e-commerce influencers are saying if your sale is equal to 8 millions annually than you have to register for STRN otherwise we can skip it, is it true?
Impressive approach. Courier companies are asking for NTN as it is required now and you cannot sell if not registered with FBR. They’re asking for your STRN because if you’re already registered they will not deduct GST of 2%, as in case if you’re registered then you’re liable for 18%. These new rules are explained in our publication about the New 2% Sales Tax on Online Goods. As per your 2nd part about some social media influencers, Maybe they’ve accurate and latest updates which we haven’t yet found or received as the law is newly introduced and notifications might come sooner from FBR clarifying all these. As of now the GST on online goods is 2% who are not required to register for STRN (all the online seller except manufacturers, retailers having shops in big malls, wholesellers, distributors etc).
Hello
I have a question, since courier companies are charging 2% sales tax and 2% income tax on our COD amount. Is registration in sales tax is compulsory now for all e-commerce brands?
And if registration in sales tax is compulsory, after registration how much sales tax e-commerce brands needs to pay to fbr, is it 2% or 18%
Section 14 of the Sales Tax Act has been expanded through sub-sections 1A and 1B, making it mandatory registration for any person selling digitally. They will apply 2% for digital while 18% for physical or other reduced rates for different products and services.
Dear Sir, Kindly explain about sales tax on e-commerce transaction in Pakistan, Courier companies start deducting 2 % sales tax on behalf of their customer on each receipts collected. Is sales tax applicable on e-commerce transactions or not?
Yes, 2% GST is applicable for digital goods/services separately on consumers.
Dear Sir,
So for my store which selling Accessories like sunglasses, jewellery etc what should we do should we register for GST right away what are compliance after registration. (Already Registered NTN on personal).
How much should we be charging customers in terms of Sales Tax?
Is there any threshold for registration as our volume is very low as of now.
Any exemption for Women?
Small retailers or sellers doesn’t need to get register for GST. 2% will be deducted as GST from their sales which will charge to customer. However, if you register for GST then you will collect 18% of GST on your own from customer and COD will not withhold your GST.
Good work bro
Appreciate the clarity around the WHT scope. One concern is how small e-commerce sellers will manage compliance—do you think the FBR might introduce simplified procedures or thresholds to ease the burden on micro-entrepreneurs?