ISLAMABAD – The federal government has proposed imposition of an 18 percent sales tax on online shopping in the budget for fiscal year 2025-26.
While presenting the budget speech in the National Assembly, Federal Finance Minister Muhammad Aurangzeb proposed amendments to the Sales Tax Act.
He stated that the rapid growth of online businesses and digital marketplaces has created challenges for traditional businesses that comply with tax laws.
He emphasized that in order to establish a fair competitive environment and ensure full compliance with tax regulations, it is proposed that courier and logistics service providers delivering goods on behalf of e-commerce platforms will collect sales tax at the rate of 18% from these platforms and submit it to the Federal Board of Revenue (FBR).
If the proposal is approved by the parliament, the online buyers will have to pay 18% tax on their shopping from July 2025.
The finance minister further stated that individuals conducting business through e-commerce will be required to submit their monthly transaction data and tax reports.
He further mentioned that it has been proposed to increase the tax rate on interest income by 5%, raising it from 15% to 20%.
This increase will apply only to passively earned income and not to income from national savings schemes.
In addition, a 25% tax has been proposed on income earned through debt-based instruments, while no changes have been made to the tax rate on dividends earned from shares.
