E Commerce Tax Debate Escalates As Senate Panel Demands Clarity

The Senate Standing Committee on Information Technology and Telecommunication has raised urgent questions about recent tax notices that target small online sellers. The panel said that the Federal Board of Revenue (FBR) must explain the legal basis for its registration and collection measures aimed at e-commerce sellers.

The committee warned that sudden tax enforcement can damage new businesses and harm household sellers who earn on small online platforms.

Lawmakers noted that the wider policy framework for the digital market is under review. Officials told the committee that e-commerce definitions and tax procedures have been updated by the revenue agency this year. Industry groups and some lawmakers argued that aggressive tax measures will slow investment and job creation in the online sector.

Senator Afnanullah warned that the sector will stall if taxes are applied without careful review. He is quoted as saying, “E-commerce is part of IT. If taxes start being imposed on it, the industry will not be able to move forward.” The committee resolved to summon FBR officials to the next session to press for a clear timeline and a plain plan for phased compliance.

Policy experts urged a simple approach that protects small sellers while bringing larger platforms into the formal tax net. The committee also noted public concern about home-based sellers facing sudden demands.

The panel will review FBR responses before recommending changes to law or practice. Observers said the outcome will shape how Pakistan balances tax fairness with digital growth.