ISLAMABAD: The Federal Board of Revenue (FBR) has unveiled a new requirement for e-commerce suppliers and courier companies that is set to reshape tax compliance in Pakistan’s booming online marketplace. Under the updated regulations, courier firms must now submit withholding tax statements directly via the FBR’s IRIS portal, strengthening transparency and accountability in digital sales reporting.
Starting July 2025, the Finance Act expanded the withholding tax regime to cover domestic e-commerce transactions, including cash-on-delivery (CoD) and digitally paid orders. Courier companies acting as the fulfilment link between sellers and customers are now designated as withholding agents, responsible for withholding tax on behalf of online sellers and submitting detailed statements to FBR.
Under this framework, sellers who deliver goods through courier services must ensure their income tax registration (NTN) and sales tax registration are in place, or risk being unable to use delivery services. FBR has explicitly barred online marketplaces and couriers from processing transactions for unregistered sellers, ensuring tax compliance across the sector.
The withholding tax rates under the new system vary based on payment method: digital payments through banks and wallets are subject to a lower rate, while CoD transactions handled by courier firms attract a higher withholding tax, typically around 2% for local sellers.
Couriers must file periodic withholding statements through IRIS, listing all transactions, tax deducted, seller details, and amounts. E-commerce sellers are advised to review and reconcile these statements with their own sales records to ensure accuracy and avoid future notices or discrepancies.
Industry experts say this policy marks a significant step toward documenting e-commerce income, expanding the tax base, and curbing informal online trade practices. By channeling compliance through the digital IRIS portal, FBR aims to enhance efficiency and data integrity while strengthening the government’s revenue framework amidst rapid digital commerce growth.
