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Major courier companies have notified their customers, including registered E-commerce companies and online traders, that the government will charge them the newly imposed taxes from July 1st, 2025.
Courier Companies will deduct 2 percent withholding tax and 2 percent sales tax on the delivery of different items based on Cash on Delivery (COD) and deposit these taxes to the government on behalf of sellers/ shippers as per the instructions of Finance Bill, according to the notification issued by a Courier Company to their customers.
Courier operators also instructed their sellers to register themselves with the tax authority to get delivery services. Under regulatory requirements, all sellers of digitally ordered goods in Pakistan are required to be registered for both sales tax and income tax. Without registrations, courier companies and line marketplaces will not be authorized to process or deliver such shipments.
“We strongly encourage online sellers to ensure their registration with the Federal Board of Revenue (FBR) for sales tax and income tax alike”, the notification said.
Over 2,000 courier companies operate across the country, which have witnessed growth in business volume due to the increasing trend of E-commerce and online trading in Pakistan. Major courier operators, including TCS, Leopards, Pakistan Post, SpeedeX, FedEx, DHL, M&P, BlueEx, Call Courier, Trax, DCS, APX, SWYFT.
In the budget for the next financial year, FBR designated courier services as collection agents since they hold the seller’s invoice; hence, these companies would deduct taxes from E-commerce sellers and deposit them to the tax authority. President Pakistan E-commerce Association—Karachi Chapter, Shoaib Bhatti, said that the imposition of new taxes on E-commerce companies, online business, and their logistic partners will hurt the growth of the overall ecosystem of the emerging sector significantly, which will also affect the business of each stakeholder.
He foresees that the section of major E-commerce companies and marketplaces may adjust an incremental cost within their operations to some extent, whereas small and medium-sized sellers will pass on the impact of new taxation to their customers in order to survive in the market.
The increasing taxes, petroleum product prices, and utility charges, mainly electricity, gas, and internet, are squeezing the profit margins of online businesses in Pakistan, he further said. He pointed out that the delivery charges may be passed on to customers on domestic and intracity orders through online marketplaces, he further said.
Nearly 8,000 E-commerce merchants have been registered with the banking system as per the State Bank of Pakistan (SBP). FBR officials clarified that one-time sellers and women selling goods from their homes will be exempt from mandatory registration under the new e-commerce tax rules.
