Government to tax e-commerce sector in Pakistan

Federal Board of Revenue (FBR) has submitted instructions to the chief commissioners for the compilation of budget proposals including taxation of e-commerce in coming budget (2017-18), Business Recorder reported while citing anonymous sources.

Electronic commerce or e-commerce is a term for any type of business, or commercial transaction that involves the transfer of information across the Internet. It covers a wide range of business activities taking place through the internet such as online shopping, online trade, business-to-business transactions, financial exchanges etc.

The e-commerce sector of Pakistan has shown tremendous growth over the last couple of years but, until now, it has not been registered with FBR as a sector which can be tapped into for revenue generation.

The taxation of e-commerce would now be considered in the budget as a source of revenue generation. Sources said that the tax policy for e-commerce must ensure that businessmen and capitalists should understand the tax laws and regulations. They should see the link among their business, its profits or turnover and the corresponding taxes.

Following areas can be identified as having revenue potential for optimum realization of taxes

• broadening of the tax base
• measures for improvement in the tax to GDP ratio
• rationalisation/analysis of tax exemptions
• withholding taxes and their application for economic development in the country
• taxation of e-commerce

Tax Policy Conference would be held at FBR Headquarters to draft budget proposals on March 16, 2017. FBR has invited the budget proposals from Chief Commissioners of Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs). The meeting will be chaired by special assistant to the Prime Minister. The presented proposals will be critically evaluated and reviewed.

The proposals in this regard are expected to enhance the economic growth of the country.

Source: Business Recorder