Govt Enforces New Tax on Online Purchases and Cash on Delivery Transactions
Techlist Staff
Posted On June 10, 2025
In a significant move impacting Pakistan’s growing e-commerce ecosystem, the government has proposed a new taxation mechanism targeting digitally ordered goods and services. The changes come under a new provision to be added via Section 6A, aimed at treating digital commerce as a distinct block of income for taxation purposes.
Until now, there was no dedicated framework to identify and tax e-commerce transactions. The proposed amendment seeks to formalize this segment and bring it into the tax net.
Online Marketplaces and Couriers to Deduct Taxes
As per the new provision, online marketplaces and courier service providers will be designated as “prescribed persons” under Section 153 of the Income Tax Ordinance. These entities will be responsible for deducting taxes on behalf of the government from payments made to vendors who sell goods or services through digital platforms.
The government has outlined specific rates for advance tax deductions on digital transactions and Cash on Delivery (COD) orders.
Tax Rates for Payments via Digital Channels
| Sr | Description | Tax Rates |
|---|---|---|
| 1 | Where the amount paid does not exceed Rs. 10,000 | 1% of the gross amount paid |
| 2 | Where the amount paid exceeds Rs. 10,000 but does not exceed Rs. 20,000 | 2% of the gross amount paid |
| 3 | Where the amount paid exceeds Rs. 20,000 | 0.25% of the gross amount paid |
Tax Rates for Cash on Delivery (COD)
| Sr | Description | Tax Rates |
|---|---|---|
| 1 | On supply of electronic goods | 0.25% of the gross amount paid |
| 2 | On supply of clothing articles, apparels, garments etc. | 2% of the gross amount paid |
| 3 | On supply of goods other than mentioned above | 1% of the gross amount paid |
Implications for E-Commerce Vendors
These proposed taxes are likely to affect thousands of small and medium-sized vendors who rely on digital platforms and COD services for reaching customers. While the move aims to increase documentation and revenue, stakeholders in the digital economy are concerned about the potential burden on sellers and reduced margins.
Stay tuned to Techlist.pk for further analysis and industry reaction as this development unfolds.
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