ISLAMABAD: The Federal Board of Revenue (FBR) has rolled out a new mechanism to deduct sales tax on online purchases, aiming to tighten the noose on e-commerce transactions and ensure better compliance.
According to a notification issued by the FBR, amendments have been made to the Sales Tax Rules, 2006, by introducing a new chapter that deals with tax deductions on online marketplaces, payment intermediaries, and courier services.
Under the newly introduced system, if a customer places an online order and makes payment either via digital methods or through Cash on Delivery (COD), the payment channel or courier company will now be responsible for deducting the sales tax on the sold goods at the time of delivery. The remaining amount will then be passed on to the supplier or vendor.
In simple terms, the courier or payment handler will have to take tax off the top before handing over the payment to the seller.
The new rules also lay down strict reporting requirements. Courier companies involved in delivering goods for digital orders must submit a detailed monthly report to the FBR by the 10th of each month. This report must include the names of all suppliers, their registration numbers, and details of the goods delivered. The format for this report will be provided by the FBR.
Moreover, both payment intermediaries and courier firms that handle the delivery of digital orders are bound to file these detailed reports regularly, making sure that every transaction is above board and in line with the new tax compliance drive.
With this move, the FBR is looking to plug loopholes, clamp down on tax evasion in the digital space, and bring more transparency to Pakistan’s fast-growing e-commerce sector.
