FBR Exempts One-Time Online Sellers from Registration

ISLAMABAD: The Federal Board of Revenue (FBR) has officially confirmed a key FBR online seller exemption, stating that one-time sellers and women operating small home-based businesses will not be required to register as digital vendors under the new e-commerce tax policy.

The clarification came from FBR Chairman Rashid Mahmood Langrial during a Senate Standing Committee on Finance and Revenue meeting on the federal budget for 2025–26. The committee endorsed the proposal to impose sales tax on e-commerce items, but concerns arose over the burden on small and occasional online sellers.

Chairman Langrial emphasized that many online businesses collect tax from consumers but fail to deposit it with the FBR. To bridge this gap, courier companies will be designated as official tax collection agents since they have access to sellers’ invoices.

However, the new tax policy will not apply to locally provided services, and the FBR online seller exemption will protect housewives and individuals involved in one-time or casual online sales from mandatory registration.

The Finance Bill 2025–26 also outlines mandatory registration for all digital vendors, including foreign companies, if they sell goods to Pakistani consumers through apps, websites, or marketplaces. The committee reviewed penalties for non-compliance, and concerns were raised about the impact on small-scale sellers.

Beyond e-commerce regulations, the session covered enhanced enforcement powers proposed under Section 37A of the Sales Tax Act, 1990. The bill suggests up to 10 years imprisonment and hefty fines for tax fraud exceeding Rs10 million.

Previously, assistant commissioners were authorized to arrest suspected tax evaders, but the revised proposal now requires a prior inquiry and approval from the commissioner before any arrest can be made.

Minister of State for Finance Bilal Azhar Kiyani described the revision as a safeguard to “protect procedural integrity” and reduce arbitrary enforcement. Still, committee members voiced skepticism about potential misuse of power.

In response, the FBR chairman assured that a revised draft of the tax enforcement provisions would be submitted for further review. The committee will continue its discussions on the Finance Bill 2025–26 today (Monday), according to an official press release.