PEA seeks LCCI’s help to protect emerging digital economy

LAHORE: Pakistan E-Commerce Association (PEA) has sought help of the Lahore Chamber of Commerce and Industry for support in mitigating the potential damage to the e-commerce ecosystem because of new taxation policies.

In a meeting with the LCCI President Mian Abuzar Shad, the PEA delegation shared industry apprehensions and emphasized the urgent need for collaborative efforts to protect Pakistan’s emerging digital economy.

Former LCCI President Muhammad Ali Mian, delegation members Shahbaz Siddique, Imran Haider also spoke on the occasion while LCCI Executive Committee members Khurram Lodhi, Amina Randhawa and Rana Muhammad Nisar were also present.

The PEA delegation apprised the LCCI President that the sudden introduction of complex taxation measures has caused widespread unrest among stakeholders in the e-commerce industry. They said that the government’s recent policy changes were implemented without prior consultation and have created confusion due to vague legal definitions. This has raised fears of operational uncertainty among online sellers and marketplaces.

They said that the requirement for mandatory registration for GST, Sales Tax and Income Tax, even for small and home-based businesses, will place an undue compliance burden on micro-entrepreneurs and discourage new entrants from participating in the digital economy. Moreover, the imposition of a higher withholding tax on Cash on Delivery (COD) transactions, compared to digital payments, was described as discriminatory and counterproductive to the government’s stated goal of promoting digital transactions and financial inclusion.

The delegation members said that the absence of stakeholder dialogue has left the industry unprepared to deal with these changes, which are being enforced without a clear roadmap. They also expressed concern over the lack of clarity in the definitions of key terms such as “platforms” and “intermediaries,” which could result in inconsistent enforcement and further confusion in the market.

LCCI President Mian Abuzar assured full support to digital entrepreneurs and startups. He said that government policy-making must be inclusive, well-informed and designed in consultation with relevant stakeholders to ensure fairness and sustainability. He stressed the need for urgent dialogue between tax authorities and the digital business community to resolve these issues amicably. He proposed that clear and precise definitions should be introduced for terms like “platform,” “intermediary,” and “seller” to eliminate ambiguity. He also called for the introduction of revenue-based exemption thresholds for small and home-based businesses so that they are not forced into unnecessary compliance. He emphasized that there should be a uniform tax treatment for COD and digital payments to avoid disincentivizing digital adoption.

He further suggested that a transparent and efficient refund mechanism for advance tax deductions should be established to relieve financial pressure on businesses. He also highlighted the importance of allowing a transition period of at least two to three months for the smooth implementation of any new taxation policy. He said that educational programs and awareness campaigns should be launched to help businesses understand their tax obligations and successfully adapt to digital systems.

Both LCCI and PEA agreed on the urgency of the matter and resolved to work collectively to ensure that government policies support the growth of e-commerce, encourage digital innovation and protect the interests of small businesses. The proposal to hold a joint press conference at the LCCI was welcomed by the Chamber, which reaffirmed its role as a bridge between the business community and policymakers.

Copyright Business Recorder, 2025