Budget FY26: Govt to Impose Higher Tax on Cash on Delivery

The federal government has revised and simplified the proposed income tax on cash-on-delivery (COD) payments by making it higher than online payments. The revision was announced during a session of the National Assembly Standing Committee on Finance. The tax on COD transactions will be higher than for digital payments to discourage the use of cash and support the documentation of the economy. There will be separate rates for payments made in cash and those made through digital methods, said Bilal Azhar Kayani, Minister of State for Finance. The government had earlier proposed a tax between 0.25 percent and 2 percent on COD transactions. The Federal Board of Revenue (FBR) aims to collect Rs. 59 billion through this tax measure in FY2025-26. Committee Chairman Syed Naveed Qamar and other lawmakers also raised concerns about the implementation of such taxes without clear safeguards and practical thresholds for small businesses. Lawmakers urged the FBR to ensure small sellers are not unfairly burdened.