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Online Shopping Brought into Tax Net under Finance Bill 2025-26

ISLAMABAD – June 5, 2025:
The Federal Board of Revenue (FBR) has officially moved to bring online shopping and e-commerce transactions into the tax net through new provisions introduced in the Finance Bill 2025-26.

According to proposed Section 165C of the Income Tax Ordinance, all payment intermediaries and courier services involved in the delivery or facilitation of digitally ordered goods and services will now be required to deduct tax at source and file quarterly withholding statements.

These statements must include comprehensive transaction details such as:

  • The seller’s name, address, and identification (NTN/CNIC),

  • Date and invoice number of each transaction,

  • Total transaction value,

  • Amount of tax deducted at the time of payment,

  • And any additional information prescribed by the tax authorities.

This move aims to tighten oversight over Pakistan’s rapidly growing e-commerce sector, which has seen exponential growth in recent years but remained largely undocumented in terms of taxation.


Monthly Reporting Mandated for Online Marketplaces

In addition, all online marketplaces operating in Pakistan will be required to submit monthly statements to the tax authorities. These must include:

  • The name, address, and tax registration numbers (Sales Tax and Income Tax) of every registered vendor on their platform,

  • The transactional and aggregated quantum of each seller’s monthly turnover,

  • The total amount deposited into vendors’ bank accounts against digital sales.

This provision is designed to track actual sales volumes and revenue of online sellers, many of whom have remained outside the formal tax framework.


Extended Compliance Requirements

Other provisions from Section 165 of the Income Tax Ordinance—excluding sub-sections (1), (1A), and (6)—will also apply mutatis mutandis. These include:

  • Due dates for filing withholding statements,

  • Rules for revising statements,

  • Powers of the Commissioner to call for information,

  • Extensions for filing,

  • Annual reconciliation with income tax returns.

This significant development marks a turning point in Pakistan’s tax policy, reflecting FBR’s growing focus on digitisation, transparency, and broadening the tax base.

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