Banks raise concerns over new e-commerce tax in budget 2025-26 Pakistan

With the budget 2025-26 Pakistan being announced, the Pakistan Banks Association (PBA) has raised serious concerns about the workability of the government’s newly proposed tax for e-commerce.

The PBA warned that key parts of the plan lack clarity and could be unfeasible to implement without detailed guidelines.

The federal budget 2025 Pakistan unveiled a new framework to tax e-commerce transactions, including a final tax of 0.25-2% on gross receipts from digitally ordered goods and services.

The Pakistan Budget 2025 noted that online sellers register with the Federal Board of Revenue (FBR) and place significant obligations on intermediaries such as payment processors, online platforms, and courier companies.

However, the PBA raised concerns about how this system would function. Among the major concerns is the ambiguity around which rate (0.25/1/2%) applies to which type of seller or platform.

Moreover, the association noted the lack of a precise definition for “digitally ordered” transactions, pointing out that hybrid models like WhatsApp or phone-based orders could fall into a grey area.

The PBA asked whether banks, wallet providers, and fintechs would all be lumped into this category and if they are expected to enforce compliance, a role the association suggests is too complex without clear directives.

To note, PBA highlighted the complete absence of an implementation timeline or transition phase, suggesting that a sudden rollout could overwhelm the ecosystem and result in compliance failures across the board.

The association argued that without detailed rules, digital infrastructure, and coordination across platforms, the new tax regime may create more confusion than compliance in Pakistan.