Pakistan’s e-commerce ecosystem has called upon the federal government to reconsider the tax and compliance policies proposed in the Finance Bill 2025-26 and begin a structured consultation with industry stakeholders to develop practical and growth-oriented tax measures. Speaking at a press conference held at Karachi Press Club on Friday, representatives from Chainstore Association of Pakistan (CAP), Pakistan E-Commerce Association (PEA), and other stakeholders—including freelancers, marketplaces, courier companies, payment processors, and digital platforms—highlighted concerns over the bill’s potential to disrupt the sector.
Among the attendees were Muhammad Zeeshan, Shoaib Bhatti, Joint Secretary CAP Bushra, Atta Bin Azad, Mahwish from Payfast, Shoaib Ahmed, and others who collectively voiced industry apprehensions. They emphasized that while the sector fully supports fair taxation and documentation, the sudden imposition of extensive compliance requirements poses a significant threat to both small-scale and established online businesses. Representatives noted that the sector has experienced over 35 percent annual growth in the past five years, now encompassing over 100,000 micro and small online sellers, supporting livelihoods for more than a million people nationwide. With a market size of Rs 2.2 trillion or $7.7 billion, e-commerce contributes around 2 percent to Pakistan’s GDP.
The group acknowledged the government’s efforts to introduce a 5 percent digital presence levy on foreign platforms such as Temu and welcomed improved data reporting standards. However, they cautioned that these positive initiatives risk being overshadowed by overbearing tax obligations that lack industry input and a phased approach. Referring to the government’s top-down enforcement strategy, industry leaders drew parallels to the previously unsuccessful Tajir Dost scheme, which faltered due to impractical implementation and lack of dialogue.
Specific concerns raised included the blanket 2 percent sales tax withholding on all sellers, mandatory sales tax registration for every online merchant regardless of size, complicated income tax withholding at six different rates, and penalties reaching Rs 500,000 per case affecting platforms, logistics partners, and sellers alike. The immediate enforcement of these measures by July 1st without a transition period has further heightened industry concerns.
To address these challenges, stakeholders proposed withholding the 2 percent sales tax only from non-ATL sellers, and instead of mandating full sales tax registration and monthly filing for small and home-based businesses, they recommended a simpler income tax registration process. Representatives appealed to the Prime Minister, Finance Minister, Commerce Minister, and FBR to halt the implementation and initiate a transparent, inclusive dialogue with industry players to ensure that taxation policies are both enforceable and supportive of digital growth and entrepreneurship.
