In a significant policy shift aimed at expanding the tax net, Pakistan’s Federal Board of Revenue (FBR) has finalized the Finance Bill for the fiscal year 2025–26, proposing an 18% sales tax on online marketplaces including Daraz, OLX, Zameen, and PakWheels.
This new tax measure is part of the government’s broader effort to increase revenue collection and meet the International Monetary Fund’s (IMF) requirements to widen the country’s tax base. The proposal comes amid Pakistan’s commitment to meet an ambitious tax revenue target of Rs. 14.3 trillion for the upcoming fiscal year, set under the IMF’s ongoing financial assistance framework.
According to sources familiar with the development, the Revenue Division has formally drafted this new policy, which will directly affect the e-commerce sector—an industry that has seen substantial growth in recent years. These platforms facilitate a large volume of online transactions ranging from consumer goods to vehicles and property listings, yet much of their economic activity remains outside the conventional tax framework.
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With this 18% sales tax, the government aims not only to increase tax compliance among digital platforms but also to create a more equitable taxation system between traditional retailers and online businesses. Until now, many e-commerce sellers operated in a relatively unregulated space compared to their brick-and-mortar counterparts.
This move is expected to significantly reshape the digital commerce landscape in Pakistan. Businesses operating on these platforms will likely face higher operational costs, which may be passed on to consumers. However, it could also encourage formalization within the e-commerce sector, prompting better documentation, transparency, and regulatory compliance.
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The FBR’s decision is being seen as a last-minute but crucial effort to fulfill the IMF’s conditions ahead of the next tranche of financial support. It reflects the government’s ongoing push to broaden the tax base and reduce fiscal deficits without relying solely on traditional sectors for revenue.
As digital commerce continues to play a key role in Pakistan’s economy, regulatory changes like this mark a turning point for online businesses and may set the tone for future fiscal policies aimed at integrating the informal digital economy into the formal tax system.
