Pakistan’s federal government has introduced new income tax rates on payments for digitally ordered goods and digitally delivered services. The updated tax framework categorizes payments based on transaction methods—digital banking channels and cash-on-delivery (COD) transactions—to ensure broader tax compliance across the e-commerce sector.

Tax Breakdown:

🔹 Digital Payments (Banking Channels):

• Up to Rs. 10,000: 1% tax
• Between Rs. 10,000–20,000: 2% tax
• Above Rs. 20,000: 0.25% tax

🔹 Cash-on-Delivery (Courier Services):

• Electronic & electrical goods: 0.25% tax
• Clothing, apparel, garments: 2% tax
• Other goods: 1% tax

Additionally, the government has adjusted real estate investment taxation, setting the rate at 15% under Part III, Division I, clause (b).

Significance:

This move aims to streamline tax collection from e-commerce transactions, ensuring both domestic and international vendors contribute their share. By introducing payment-based taxation, the government enhances monitoring of digital purchases and COD transactions, creating a more structured tax framework.

The updated tax rates are expected to impact businesses using online payment solutions and COD logistics, requiring them to adjust pricing and reporting mechanisms accordingly.