The retail sector in Pakistan is on the brink of significant regulatory changes as the government considers new taxation measures for e-commerce platforms. The International Monetary Fund (IMF) has recommended implementing sales and value-added taxes on digital transactions to bolster revenue collection.
Under the proposed regulations, e-commerce platforms with substantial control over transactional aspects will be required to pay taxes on their goods and services. This includes sales made by non-resident vendors to local consumers, a move aimed at creating a level playing field for local businesses.
This development comes as Pakistan and the IMF finalize a staff-level agreement for the second and final review under the $3 billion Stand-By Arrangement (SBA). Islamabad has expressed interest in pursuing a successor medium-term Fund-supported program, with taxation of digital platforms being a key component.
The proposed taxation framework seeks to align Pakistan’s e-commerce sector with international standards while also generating much-needed revenue for the government. It is expected to undergo further consultations and assessments before implementation, with stakeholders closely monitoring the potential impact on the rapidly growing digital economy.
