FBR expects e-commerce tax proposal to generate Rs65 billion
Both income tax and sales tax slapped on digital platforms through different means
June 18, 2025
- Advance tax on offshore digital services proposed to increase to 15%.
- FBR proposes Digital Presence Proceeds Tax to fetch Rs39 billion.
- Tax will apply to companies like Google, YouTube.
ISLAMABAD: The Federal Board of Revenue (FBR) has anticipated an additional revenue of Rs65 billion in the upcoming fiscal year from its proposed two taxation measures targeting e-commerce and international platforms flooding their goods in Pakistan, The News reported on Wednesday.
Previously, the advance tax on offshore digital services was set at 10%, but it is now proposed to increase to 15%. This tax will apply to companies like Google and YouTube, with the intention of encouraging them to establish offices in Pakistan.
Withdrawal of exemption on import of solar panels and parts with imposition of 18% GST will yield additional revenues of Rs20 billion. However, PPP is extending full-fledged opposition to block approval of GST on solar panels. If parliament does not grant its assent, the government will have to propose some alternate measures to bring Rs20 billion into the national kitty.
Both income tax and sales tax have been slapped on digital platforms through different means. To tax international e-commerce flooding their goods in Pakistan, FBR proposed Digital Presence Proceeds Tax to fetch Rs39 billion with effect from July 1.
Taxing domestic e-commerce business through both Income Tax and Sales Tax will fetch Rs26 billion into the national kitty.
In the budget 2025-26, FBR slapped additional taxation measures of Rs312 billion. Major revenue spinner is to increase rates of advance tax on rendering of services which will bring an additional Rs70 billion.
Withdrawal of GST exemption on imports and supplies for erstwhile FATA/PATA will fetch an additional Rs30 billion. The FBR’s move to slap increased tax rate on profit on debt will cough up Rs56 billion. The proposal to withdraw exemption on pension will help FBR to collect additional Rs2 billion.
Withdrawal of lower GST rate on local motorcars, having engine capacity of 850cc, will bring an additional Rs7 billion in the budget for 2025-26. Increase in tax rates on advance tax on payments to Non Residents will fetch Rs10 billion. Rationalisation of second schedule will bring an additional Rs19 billion.
