New Taxes to Make Online Shopping More Expensive

KARACHI (Web Desk) —  The government has introduced new taxes on online shopping, both for local and foreign e-commerce platforms, which will make buying goods online more expensive for Pakistani customers.

Key Changes:

1. Tax on Digital Payments:

   • A 1% tax will be charged on digital payments under Rs10,000.

   • For payments between Rs10,000 to Rs20,000, the tax will increase to 2%.

   • For payments above Rs20,000, the tax rate will be 0.25%.

   • Cash-on-delivery payments will also be taxed, with different rates depending on the product:

     • Electronic items: 0.25%

     • Clothing: 2%

     • Other items: 1%

   • Payment gateways will collect the tax on digital payments, while courier services will collect it for cash-on-delivery orders.

2. New Rules for Online Sellers:

   • Online sellers must be registered under the Sales Tax Act to sell their goods on e-commerce platforms.

   • This means that unregistered shopkeepers will not be allowed to sell their products online.

3. Tax on Foreign Online Marketplaces:

   • The government has introduced a new Digital Presence Proceeds Tax Act, 2025 to tax foreign vendors that sell goods to Pakistanis online.

   • Foreign platforms like AliExpress, Temu, and Amazon will be taxed 5% on the total amount paid by customers for products purchased.

   • The tax will be collected by banks, financial institutions, or payment gateways that process payments.

   • Customs officials will ensure that goods bought online from foreign marketplaces will not be delivered unless tax payments are confirmed by courier companies.

4. Tax on Social Media Ads:

   • Foreign companies running online ads in Pakistan will also be taxed. They will have to pay 5% of the amount spent on advertisements to social media platforms.

   • These companies will need to file quarterly reports about the taxes they’ve paid, or they will face penalties of up to Rs1 million.

The government hopes these new taxes will help bring more e-commerce vendors under the tax system and generate revenue for climate and development projects.