Federal Board of Revenue is projecting Rs65 billion in revenue from newly introduced taxation measures targeting both international and domestic digital commerce. These measures are a part of broader efforts under the Finance Bill 2025-26 aimed at enhancing revenue through expanding the tax net across technology, e-commerce, and renewable energy sectors.
Among the notable provisions is a 15 per cent tax being applied to offshore digital services, directly impacting tech giants such as Google and YouTube. The hike falls under the reclassification of offshore digital service offerings and is expected to substantially raise costs for advertisers and content platforms operating in Pakistan. This adjustment is designed to tap into the substantial volume of offshore-generated revenues not previously subjected to direct taxation.
FBR anticipates generating Rs39 billion by taxing foreign digital goods platforms. These are largely global marketplaces and e-commerce companies facilitating cross-border sales of digital products and services in the local market. The move aims to level the playing field between international sellers and local digital vendors who are already subject to various domestic taxes.
On the domestic front, Rs26 billion is projected to be collected through a combination of income and sales taxes applied to local e-commerce businesses. This includes online marketplaces, digital merchants, and platform-based service providers operating within Pakistan. The initiative focuses on aligning taxation policy with the rapid growth of the country’s digital economy, which has become a significant component of retail, services, and freelance sectors.
Another key revenue measure includes Rs20 billion expected from the application of general sales tax on solar panel imports. This proposal has met resistance from the Pakistan Peoples Party, citing concerns over energy affordability and the impact on renewable adoption. Critics argue that the GST may disincentivize investment in clean energy at a time when energy diversification remains a national priority.
In parallel, FBR has announced that the removal of GST exemptions in the FATA and PATA regions will generate an additional Rs30 billion. The exemption rollback forms part of broader efforts to bring uniformity in tax enforcement across the country, although concerns have been raised by local stakeholders regarding the socio-economic implications of such policies in post-merger tribal regions.
The overall taxation strategy reflects a shift towards formalising the digital economy and integrating emerging sectors into the national tax structure. However, several industry voices, including e-commerce associations and renewable energy advocates, have flagged potential risks associated with abrupt implementation, lack of transition periods, and increased compliance burdens. These stakeholders continue to urge the government to balance fiscal targets with incentives that support innovation, access to clean energy, and SME digitisation.
FBR’s digital and e-commerce tax agenda is being viewed as part of a broader fiscal consolidation framework aimed at addressing the country’s revenue shortfalls. While the outlined tax streams promise significant inflows, their long-term sustainability and sectoral impact will depend heavily on implementation mechanisms and stakeholder engagement.
