Banks Flag Major Gaps in Pakistan’s New E-Commerce Tax Plan

The Pakistan Banks Association (PBA) has expressed significant reservations over the government’s newly proposed tax framework for e-commerce, as introduced in the Finance Bill 2025.

While the policy aims to bring online sellers into the tax net, banks warn that the approach lacks the clarity needed for practical implementation.

The Finance Bill lays out a taxation model that imposes a final tax ranging between 0.25% and 2% on the gross receipts from online sales of goods and services. It also requires online sellers to register with the Federal Board of Revenue (FBR) and places regulatory responsibilities on intermediaries like banks, fintechs, payment processors, online platforms, and even courier companies.

The PBA has raised several operational concerns:

• Ambiguity in Tax Rates: It’s unclear how the varying tax rates (0.25%, 1%, or 2%) apply to different sellers or business models.
• Lack of Definition for “Digitally Ordered” Transactions: The term remains undefined. The PBA points out that hybrid transaction models, such as orders placed via WhatsApp or phone calls, fall into a grey zone.
• Unclear Role of Intermediaries: Questions remain over whether wallet providers, fintechs, and banks are all to be considered “intermediaries” and what their enforcement obligations would entail. Without clear responsibilities or technical guidelines, PBA argues this task would be too complex to manage.

Courier Companies Also at Risk

Courier services could face operational challenges too. Without automated systems or integration with inventory and point-of-sale software, enforcing compliance under the new framework might be unmanageable.

The absence of a defined implementation timeline or transition plan has also alarmed the banking sector. A sudden enforcement, they argue, may lead to widespread compliance breakdowns, as the ecosystem won’t have sufficient time to adapt.

Without detailed rules, proper infrastructure, and clear coordination mechanisms, the PBA fears this new tax regime could result in greater confusion than actual compliance. The association is calling for comprehensive guidelines, phased implementation, and consultation with stakeholders before moving forward.