Senate body backs zero ST on stationery, okays tax on e-commerce

ISLAMABAD: The Senate Standing Committee on Finance and Revenue recommended to reduce the sales tax on stationery items from 10 percent to zero, besides gave its nod to a proposal imposing sales tax on e-commerce items.

The committee continued its third consecutive session on the Finance Bill 2025–26, under the chairmanship of Senator Saleem Mandviwalla, as part of the budget review process for the upcoming fiscal year.

The session was attended among others by Federal Minister for Finance and Revenue Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiyani, Chairman FBR Rashid Mahmood Langrial and senior officials from concerned departments.

Ministers propose eCommerce tax reforms

Opening deliberations on the Sales Tax provisions of the Finance Bill 2025–26, the committee proposed significant reforms. One key recommendation was to reduce the sales tax on stationery items from 10 percent to zero, following concerns from the Stationery Association.

The committee gave its nod to a proposal imposing sales tax on e-commerce items, with Chairman FBR clarifying that sales tax is collected from the consumer in e-commerce transactions but often not deposited with the FBR.

He further elaborated that courier services will now be designated as collection agents, since they possess the seller’s invoice.

However, sales tax will not apply to services provided locally. The Finance Bill mandates that all digital vendors, including non-resident businesses, must register in Pakistan if they sell goods digitally through marketplaces, websites, or apps. The committee reviewed new laws on Registration for anyone selling goods online to consumers in Pakistan.

Discussion were made on unregistered entities which will face strict enforcement actions Committee members raised concerns about the impact on small and one-time online sellers, prompting Chairman FBR to assure that housewives and those doing one-time transactions will be protected and won’t be required to register.

Copyright Business Recorder, 2025