The Truth About the Alleged “18% New Tax on E-Commerce” in Pakistan

In recent days, a wave of misinformation has spread across social media platforms, From Online blogs, startup pakistan, WhatsApp groups, and even among professional circles claiming that the Government of Pakistan has imposed a new 18% tax on e-commerce transactions in Budget 2025–26.

This is not true.

The Origin of the Confusion

The confusion stems from misinterpretation of proposed taxes in the Federal Budget and Finance Bill 2025. Some pages and individuals began circulating headlines such as:

“Now all online purchases will carry an additional 18% tax.”

This statement, though sensational, is misleading. Here's why.

What the Budget Actually Says

The 18% figure people are referencing is Pakistan’s standard General Sales Tax (GST), which already applies to taxable goods and services, whether sold online or offline. There is no new 18% tax specifically imposed on e-commerce businesses in the 2025–26 budget.

What Taxes Have Been Discussed for E-Commerce:

Here’s what’s actually proposed and clarified in the official documents:

• Advance Income Tax (AIT) on cash-on-delivery (COD) transactions:

  • 0.25% on amounts above Rs. 10,000

  • 0.50% on amounts below Rs. 10,000

  • To be deducted by courier companies

• 5% withholding tax (proposed in Finance Bill 2025) on digital earnings (e.g., YouTube, freelancing) to be deducted by banks (still awaiting full confirmation in Gazette form)

No new 18% GST or e-commerce-specific tax has been imposed.

Clarification from Industry Experts

Several top voices from Pakistan’s e-commerce ecosystem have stepped forward to debunk this rumor, most notably Haider Ahmed Qazi, widely regarded as one of the best Heads of E-Commerce in Pakistan.

Watch the Full Breakdown by Haider Ahmed Qazi

In the video below, Haider explains:

• Why this 18% tax news is fake

• What actual taxes apply to e-commerce

• How sellers and businesses should prepare for legitimate changes like AIT

Watch the full video here:

Final Words

Misinformation causes unnecessary panic—especially when it affects thousands of small sellers, startups, and online platforms. Always rely on official documents and trusted experts when interpreting financial laws and tax updates.

If you're in the e-commerce or digital industry, stay informed, stay calm, and stay compliant.