The FBR introduced a 1–2% withholding tax on domestic digital sales via online marketplaces.
Pakistan’s Federal Board of Revenue (FBR) issued Notification (Sales Tax) S.R.O. 1429(I)/2025 on 4 August 2025, establishing a new Chapter XIV-E in the sales tax rules.
The notification implements a withholding tax on payments for digitally ordered goods delivered within Pakistan through local online marketplaces, websites or similar applications. The measure is part of the Finance Act 2025.
The withholding tax applies at a flat rate of 1% on payments made through digital or banking channels via payment intermediaries and 2% on cash-on-delivery payments processed by courier services.
Online marketplaces must also submit monthly statements, although they are not required to withhold tax.
The forms for reporting are provided in the notification, including Form STR-34 for online marketplaces, Form STR-35 for payment intermediaries, and Form STR-36 for couriers.
