The Federal Board of Revenue (FBR) has launched an aggressive crackdown on Pakistan’s e-commerce sector, introducing sweeping tax compliance requirements for online sellers and courier companies. These measures aim to bring unregistered businesses into the formal economy and ensure transparency in digital transactions.
Under the new regulations, all online sellers operating in Pakistan are required to register with the FBR. Banks, courier services, and digital marketplaces have been instructed to immediately suspend services to any seller who fails to comply. This move is intended to formalize the booming e-commerce sector and eliminate undocumented businesses.
Courier companies and payment intermediaries are now designated as withholding agents. They are mandated to deduct sales tax on every online order, including cash-on-delivery (COD) transactions. The deducted tax must be submitted to the FBR by the 10th of each month. Additionally, couriers and payment agents must issue tax deduction certificates to sellers, detailing the vendor’s information, goods description, and tax amount deducted.
To monitor compliance, the FBR has introduced three new reporting forms:
These forms must be filed monthly by the 10th to ensure complete transparency across the e-commerce supply chain.
The enforcement is backed by updated legal provisions under Sections 6A and 153(2A) of the Income Tax Ordinance, and amendments to the Sales Tax Act (STA) 1990 and Sales Tax Rules 2006. Non-compliance will lead to severe penalties, audits, and potential shutdowns. The law explicitly prohibits any marketplace or courier service from collaborating with unregistered sellers.
All digital payments made through banks, fintech firms, and payment gateways are now subject to a 1% withholding tax. Additionally, COD orders will incur a 2% tax, deducted by courier companies before disbursing payments to sellers. These measures ensure that every online transaction contributes to Pakistan’s tax revenue.
The Finance Act 2025 introduces several significant changes, including:
The FBR’s latest measures represent the most comprehensive effort yet to regulate Pakistan’s digital economy. By enforcing mandatory registration, real-time tax deduction, and stringent reporting requirements, the government aims to ensure that e-commerce businesses contribute fairly to the national tax base. Sellers, couriers, and payment platforms must now adapt to this new compliance-driven landscape or risk facing severe penalties and operational disruptions.