E-commerce businesses in Pakistan are struggling to navigate a new tax regime introduced on July 1, 2025, as confusion grows over how the rules will be applied. Sellers, courier services, and online platforms are uncertain about the tax collection process and regulatory compliance, leading to delays and business disruption.

The Federal Board of Revenue (FBR) has identified eight major international platforms, including Facebook, Google, Netflix, and Spotify, as part of its expanded tax net. Local giants like Daraz, OLX, and Zameen have also been impacted, with total transaction volumes exceeding Rs317 billion, according to a Dawn report.

Under the new regime, an 18% general sales tax (GST) applies to all online purchases, with extra levies on non-filers. In addition, banks and digital payment companies must now submit quarterly transaction records or face penalties. However, the lack of clear instructions has left businesses in limbo.

The Pakistan E-commerce Association (PEA) and Chainstore Association of Pakistan (CAP) have both raised concerns, warning that unclear policies will hurt small sellers and burden consumers. PEA Chairman Omer Mubeen said the measures could slash profit margins and slow industry growth.

Courier companies have begun asking businesses to complete their tax registration to avoid disruptions. At the same time, international platforms have reached out to local partners to clarify compliance requirements, as even the updated Income Tax Law has not yet been uploaded to the FBR’s website.

FBR officials insist the new system aims to regulate the growing e-commerce market, protect consumers, and boost tax revenue. However, without clearer guidelines and communication, industry experts warn the current confusion may harm innovation and drive sellers away from digital platforms.