Online Retailers to Collect 18% Sales Tax from Sellers

In his latest budget speech, Finance Minister Muhammad Aurangzeb announced a major change for Pakistan’s booming e-commerce sector. The government will now require e-commerce platforms to collect an 18% sales tax from sellers using their services to address the challenges faced by traditional businesses and to create a level playing field. The change comes as online businesses and digital marketplaces continue to grow rapidly, often outpacing traditional retailers in both reach and revenue. This step aims to ensure full compliance with tax laws and to prevent unfair competition in the market. Under the new policy, e-commerce platforms providing sales and logistics services will be responsible for collecting and remitting the sales tax on behalf of their sellers. The government hopes this measure will boost tax revenues and bring greater transparency to the digital economy.