Business Desk 
Jun 13, 2025
After receiving criticism from experts and casting a gloomy shadow on the future of small and medium-sized enterprises (SMEs), the freshly announced taxation framework for the e-commerce sector seems to have irked ministries shortly after the launch of Pakistan's federal budget for the fiscal year 2025-26.
That said, the federal ministries for commerce and IT have proposed revisions to the newly announced e-commerce taxes in order to attain a modest 4.2% growth, up from the 2.7% expected for the outgoing fiscal year.
With the government having introduced an 18% sales tax on goods sold through e-commerce platforms in the budget for FY26, federal ministers Jam Kamal Khan and Shaza Fatima Khawaja stressed the need for revisions to facilitate the e-commerce sector and SMEs.
“The rapid growth of online businesses and digital marketplaces has created challenges for traditional businesses,” said Federal Finance Minister Mohammad Aurangzeb while highlighting the need for compliance with tax regulations.
Under the proposed Finance Bill 2025-26, a tax ranging from 0.25% to 2% will be applied to payments for digitally ordered goods and services using e-commerce platforms.
For transactions reaching up to Rs10,000, consumers will pay 1% of the gross amount, and for amounts between Rs10,001 and Rs20,000, the tax rises to 2%.
In addition to that, different tax rates apply for cash on delivery, with 0.25% for buying electronics and 1% on clothing.
The initiative is purportedly aimed at addressing key issues in Pakistan's rapidly expanding e-commerce sector while ensuring a level playing field for all businesses.
