Pakistan's GST on Cross-Border Online Sales: Key Insights for E-Commerce

June 10, 2025

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The Pakistan Federal Board of Revenue announced that, following the recommendation of the Institute of Cost and Management Accountants of Pakistan (ICMAP), it is considering introducing the General Sales Tax (GST) on cross-border online sales as part of the upcoming budget for 2025–26.

Taxation of Cross-border Online Sales

The Federal Board of Revenue (FBR) officials emphasized that they are exploring proposals and recommendations to impose a GST on cross-border online sales, specifically to subject international e-commerce platforms facilitating sales to Pakistani consumers to GST requirements.

The ICMAP recommendations view this measure as suitable to address the budget gap created by the fact that global platforms, such as Amazon or AliExpress, do not collect and remit any taxes on their sales. Moreover, the introduction of GST on cross-border online sales would contribute to setting the same rules for domestic and foreign sellers.

Furthermore, the Institute of Chartered Accountants of Pakistan (ICAP) also highlighted the importance of imposing taxes on e-commerce and digital services relating to the e-commerce sector. ICAP's recommendations include several measures to establish a unified national mechanism, addressing the issue of miscommunication between provincial revenue authorities and the FBR.

To establish a more coordinated approach, the ICAP recommended capturing revenues from digital services provided through both domestic and foreign platforms via banks and financial institutions, creating a fair revenue-sharing model among provinces, and allowing service providers to submit a single tax return aligned with the FBR's upcoming sales tax return system.

Conclusion

E-commerce businesses will have to wait until the FBR finishes drafting and publishes the 2025–26 Budget to see if new rules for cross-border online sales will be introduced. Moreover, the 2025-26 Budget proposal should provide insight into when such changes are expected, the implementation timeline, and who will be subject to these requirements.

Therefore, e-commerce companies should closely monitor for any future FBR announcements relating to the budget for the next fiscal year and GST rules for cross-border sales.

Source: Federal Board of Revenue

What is the proposed GST on cross-border online sales in Pakistan?

The Federal Board of Revenue (FBR) in Pakistan is considering introducing GST on cross-border online sales as part of the 2025–26 budget. This would apply to international e-commerce platforms like Amazon or AliExpress selling to Pakistani consumers.

Why is Pakistan considering GST on cross-border online sales?

The proposed GST aims to address the budget gap caused by global e-commerce platforms not collecting and remitting taxes on their sales. It also seeks to create equal tax rules for both domestic and international sellers.

How would the GST affect e-commerce businesses in Pakistan?

E-commerce businesses would need to comply with the new GST rules if they sell cross-border. They will need to track announcements from the FBR to understand the implementation timeline and the exact requirements.

What other recommendations were made by ICAP regarding e-commerce taxation?

The Institute of Chartered Accountants of Pakistan (ICAP) recommended creating a unified national mechanism for digital services taxation. It also suggested capturing revenues from both domestic and foreign digital services through financial institutions.

How will the proposed GST affect foreign e-commerce platforms like Amazon?

Foreign e-commerce platforms selling to Pakistani consumers will likely be subject to the new GST regulations, requiring them to comply with the same tax requirements as local sellers.

When can e-commerce companies expect clarity on the GST rules for cross-border sales?

E-commerce companies should wait for the 2025–26 Budget announcement from the FBR, which will provide details on the implementation of GST for cross-border online sales, including the timeline and which businesses will be affected.

GST