ISLAMABAD: The Federal Board of Revenue (FBR) chairman Rashid Mahmood Langrial has confirmed that women selling goods from home and individuals conducting one-time sales will not be subject to mandatory online business registration. His remarks came during a recent session of the Senate Standing Committee on Finance and Revenue, where key elements of the federal budget were under review, particularly those related to the taxation of e-commerce and digital business activities.
As the government seeks to enhance compliance in the digital sector, the FBR has proposed mandatory registration for all online vendors, including international platforms that cater to Pakistani consumers. However, the chairman clarified that such requirements will not be enforced upon home-based or informal sellers making limited or non-recurring sales. This move comes in response to committee concerns about the disproportionate effect of such regulations on small-scale and one-time sellers, especially women operating from home.
The meeting also focused on the broader e-commerce tax regime, with the committee approving a proposal to impose sales tax on goods sold via online platforms. The FBR chairman noted that many online businesses are already collecting sales tax from buyers but failing to remit it to the authorities. To address this issue, courier companies have now been designated as tax collection agents due to their access to key transaction data, including seller invoices. This operational change aims to close the loop on tax collection without overburdening sellers directly.
It was also clarified that sales tax will not apply to services provided domestically, ensuring that the new measures specifically target product-based transactions conducted digitally. Further deliberation was held on the enforcement mechanisms and penalties outlined in the Finance Bill 2025–26, particularly those aimed at tackling tax evasion.
Under the current draft of the Finance Bill, individuals involved in tax fraud exceeding Rs10 million may face imprisonment of up to 10 years along with heavy fines. The scope of authority granted to tax officials under Section 37A of the Sales Tax Act, 1990, was reviewed in detail. Previously, assistant commissioners held the power to arrest tax evaders, but new amendments now require a formal inquiry and prior approval from the commissioner before any arrest is made.
Minister of State for Finance Bilal Azhar Kiyani stated that this amendment serves to preserve due process and reduce arbitrary use of arrest powers. Despite this explanation, some committee members expressed reservations about potential misuse of authority under the revised structure. In light of these concerns, the FBR chairman committed to submitting a revised draft of the relevant provisions.
The Senate committee is set to continue discussions on the Finance Bill 2025–26, including ongoing concerns about e-commerce taxation, compliance enforcement, and the need to balance regulatory oversight with economic inclusion. The session highlighted the government’s efforts to bring digital trade into the formal economy while ensuring that small-scale entrepreneurs and low-volume sellers are not unnecessarily burdened.
