FBR has taken another step toward reducing the use of cash in the economy by setting a limit of Rs 200,000 on Cash on Delivery (CoD) orders in the e-commerce sector. The same limit will also apply to retail outlets across the country.
According to the latest income tax circular for 2025-26, the decision is part of the government’s larger plan to move Pakistan toward a digital and cashless payment system. By restricting large cash transactions, officials hope to bring more transparency into the retail and online markets.
The new rules also introduce a tax mechanism for e-commerce payments. All digital transactions carried out through websites, online marketplaces, or mobile applications will now be taxed.
Payment intermediaries, such as banks, financial institutions, forex dealers, and digital gateways, are responsible for deducting a 1% withholding tax on these payments before transferring them to sellers.
For orders delivered through courier companies under the CoD model, a 2% tax will be deducted and deposited with the national treasury. This tax will be considered final on the income earned from both local and export sales.
FBR has also made it compulsory for e-commerce vendors to register for income tax. Couriers and online marketplaces will not be allowed to work with unregistered sellers. In addition, they must submit periodic reports about the vendors operating through their platforms.
Authorities believe these measures will not only promote digital payments but also help bring more online sellers into the formal economy. Non-compliance, however, will attract penalties and fines.
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