ISLAMABAD – Higher Cash-on-Delivery Tax unveiled to boost financial documentation as government revises Tax Policy to rake in Rs59 Billion in Fiscal Year 26.
Sharif led government announced revised taxation structure for cash-on-delivery (COD) payments, applying higher rate on cash transactions compared to digital ones in an effort to promote financial transparency and reduce cash dependency in the economy.
Newly appointed Minister of State for Finance revealed change during a recent meeting, saying separate tax rates will now apply to COD and digital transactions. FBR originally proposed tax ranging from 0.25% to 2% on COD payments, and aims to collect Rs. 59 billion through this measure in the 2025–26 fiscal year.
Pakistani government also introduced Digital Presence Proceeds Tax Act, 2025, a new measure targeting the income of foreign digital platforms operating in Pakistan without a physical presence. This includes a 5% withholding tax—called the Digital Transactions Proceeds Levy—on payments made to both local and international online vendors like Amazon, Google, Facebook, Netflix, Daraz, and others.
The levy will apply to payments for both digital and physical goods or services delivered to Pakistani consumers, including areas such as streaming, cloud services, online education, digital consultancy, and remote banking.
Budget 2025 also proposes applying 18% VAT to digital marketplaces such as Daraz, OLX, Zameen, and PakWheels. This aims to standardize taxation across online platforms and close existing loopholes in the digital economy.
Govt proposes 18% sales tax on online shopping in Budget 2025-26
