ISLAMABAD: The federal ministries of Commerce and Information Technology have jointly urged a revision of the newly proposed taxation structure for the e-commerce sector under the federal budget for 2025–26.
Unveiled by Finance Minister Muhammad Aurangzeb on Tuesday, the budget includes an 18% sales tax on goods sold via online platforms. Aurangzeb justified the move as essential for creating a level playing field with traditional businesses adhering to tax regulations.
However, Federal Ministers Jam Kamal Khan and Shaza Fatima Khawaja have raised concerns over the implications for Pakistan’s fast-growing e-commerce industry and its network of small and medium enterprises (SMEs). In a high-level meeting, both ministers emphasized the need for a more balanced and growth-friendly taxation approach.
According to the Finance Bill 2025, the government has also proposed tax rates ranging from 0.25% to 2% on digital transactions, including cash-on-delivery (COD). Digital payments under Rs 10,000 would be taxed at 1%, those between Rs 10,001 and Rs 20,000 at 2%, and amounts exceeding Rs 20,000 at 0.25%.
For COD purchases, electronic goods would incur a 0.25% tax, apparel and general items 1% each.
The Ministry of Commerce noted that Pakistan’s e-commerce market reached $7.7 billion in 2024, with an expected 17% compound annual growth rate through 2027.
To support sectoral reform, a joint working group comprising officials from Commerce and IT ministries has been established to develop comprehensive recommendations on taxation, vendor compliance, and digital payments. These will be submitted to the Prime Minister for review.
Minister Kamal further confirmed that the updated eCommerce Policy 2.0 is nearing finalization and will soon be tabled before the federal cabinet for approval.
