Pakistan to tax online commerce platforms on IMF suggestion

The retail landscape has largely changed in Pakistan and other countries amid boom in e-commerce, and now the government is likely to impose taxes on digital platforms on IMF recommendations.

Lately, Pakistan and International Monetary Fund (IMF) reached staff-level agreement on second and final review under the $3 billion Stand-By Arrangement (SBA) while Islamabad also expressed interest in successor medium-term Fund-supported program.

To maximise recovery, International Monetary Fund (IMF) has proposed general sales tax and value-added tax on digital platforms in Pakistan.

It said e-commerce platforms that control key elements of transactions with consumers need to pay taxes on their products and services, as well as sales by non-resident vendors to local consumers.

It said the platforms that allow vendors to list services as advertisements would be exempt from the next move. IMF further suggests taxing transactions involving digital products or services sold by non-resident sellers to government departments as business-to-business transactions.

Pakistan, IMF reach staff-level agreement for release of 1.1bn tranche under SBA

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