Govt Plans to Tax Online Shopping in Budget 2025

As Pakistan prepares to present Budget 2025, the federal government is reportedly planning to introduce a tax on online shopping. This decision could affect millions of consumers and small businesses that rely on e-commerce platforms like Daraz, OLX, and international websites like Amazon.

The move is being seen as a step toward broadening the tax base, but it has raised concerns among online shoppers, retailers, and digital entrepreneurs.

• Online shopping to be taxed under Budget 2025 proposals.

• E-commerce platforms and digital sellers are likely to be affected.

• Consumers may face extra charges at checkout.

• The government aims to increase revenue and regulate online trade.

• The proposal includes sales tax, income tax, and service charges for digital transactions.

• Mixed reaction from the public and e-commerce businesses.

According to officials from the Ministry of Finance, Pakistan’s digital economy is growing fast, but a large part of it remains untaxed. By taxing online purchases, the government hopes to:

• Boost national revenue.

• Level the playing field for brick-and-mortar businesses.

• Reduce the budget deficit.

• Ensure tax compliance from freelance and online sellers.

“Digital commerce is now a billion-rupee industry. It’s time to regulate and tax it like any other business sector.”

• Expect to pay more at checkout.

• International products may become more expensive due to import taxes.

• Discount-based shopping might lose its appeal.

• May face strict registration and documentation requirements.

• Potential increase in accounting and legal costs.

• Low-income sellers or students may struggle to stay compliant.

• Will need to adjust their pricing models.

• Likely to invest in compliance infrastructure.

• May see a temporary drop in sales due to price hikes.

Pakistan’s digital economy is growing rapidly:

• Over 4 million Pakistanis shop online.

• E-commerce revenue crossed PKR 100 billion in 2024.

• Thousands of freelancers and startups rely on digital sales for income.

Experts warn that over-taxation could:

• Slow down growth.

• Push digital sellers into the informal economy.

• Discourage foreign investment in local e-commerce platforms.

• It’s time for fair taxation for all businesses.

• This will help the government collect much-needed revenue.

• It could improve transparency in the online economy.

“Taxing e-commerce is inevitable. But the implementation must be fair and gradual to avoid stifling growth.”

“Most online sellers are young individuals working from home. The government should first offer tax training and support before imposing penalties.”

The new proposals may also include service tax on platforms like Fiverr, Upwork, and Freelancer.com. If implemented:

• Freelancers may have to report their income.

• Tax may be deducted directly via banks or mobile wallets.

• Platforms could be asked to share data with FBR.

While the move to tax online shopping aims to increase state revenue and bring digital sellers into the formal economy, how it's implemented will determine its success or failure.

The need for tax reforms is real, but the government must ensure that innovation, youth entrepreneurship, and digital growth are not harmed in the process.