Experts Want Tax On Online Marketplaces To Be Waived

KARACHI:

Experts have urged the government to drop the proposed general sales tax (GST) on e-commerce marketplaces, claiming that it would stunt the embryonic industry’s growth.

“Marketplaces are a new phenomenon in this country and need much more time to grow and strengthen,” Nest I/O Founder Jehan Ara commented on his official Twitter account. It will be too much for them to absorb a 17 percent GST.”
“Do we want to put a stop to it? ” she inquired.

“We as an online marketplace have seen several constructive developments in the federal finance bill 2021,” Daraz Group Global CFO Kiran Faruqi told The Express Tribune. “However, there have been certain changes proposed in the Sales Tax Act 1990, which pose a threat to the nascent marketplace industry in the country.”
According to her, the plan specifies that platforms that operate online marketplaces will henceforth be considered tier-1 retailers and will be taxed at a rate of 17% on all transactions done on the platforms.or an online marketplace model to work, the title of goods must remain with the seller – not the online marketplace as it would be the case if the proposal is implemented,” Faruqi highlighted.

According to her, the idea effectively turns the online marketplace become a legal vendor rather than the product’s actual seller.
“Other countries, including several Asian countries, have put taxes on online marketplaces, but the rates are quite low,” Topline Securities ICT analyst Umair Naseer said. “The government’s goal is to expand the revenue base, but the equation should also benefit all stakeholders.”
“We believe that if the idea is passed, it will severely impede the industry,” she stated.Without online marketplaces that enable merchants access and engage with users by leveraging the internet and cutting-edge technology, SMEs would be unable to compete effectively and complete as many transactions, resulting in a reduction in overall economic activity, job creation, and tax collections.
“These policymakers have not understood the basic principle of sales tax,” UNISAME President Zulfikar Thaver remarked, echoing the sentiments of his colleagues.“According to the sales tax handbook, it is imposed to discourage spending on the item, and it is mainly imposed on imported commodities or items manufactured of imported raw materials; such as cigarettes, liquors, luxury items, and so on,” he explained.

According to Thaver, retail firms have chosen online platforms as a result of the Covid-19 outbreak, and instead of assisting them, the government has imposed a sales tax.
Consumers would lose convenient access to a huge number of commodities across categories that are crucial in their everyday lives, according to the Daraz official, which would negatively effect their quality of life.

“We believe it would be more beneficial to focus on creating incentives for unregistered retail participants to digitalize and register themselves to achieve the ultimate goal of expanding the tax net for SMEs – this would serve the digitalisation vision more fruitfully by activating SMEs and maximising long-term tax revenues,” Faruqi suggested.

Hot this week

ABHI Microfinance Bank Crosses PKR 7 Billion Digital GLP Milestone Amid Continued Digital Banking Growth

ABHI Microfinance Bank crosses PKR 7 billion in Digital GLP, highlighting customer trust and continued growth across its digital banking journey.

NayaPay Partners With Kalorist To Offer 80% Discount On Subscription Plans For Cardholders Across Pakistan

NayaPay has partnered with Kalorist to offer cardholders an 80% discount on one-month and three-month subscription plans, subject to terms and conditions.

1LINK Sponsors International Information Security Conference To Highlight Cybersecurity Across Pakistan Financial Ecosystem

1LINK sponsors the 18th International Information Security Conference in Karachi, focusing on cybersecurity, data sovereignty and security challenges in banking.

Easypaisa Digital Bank Becomes First Acquirer Bank Live On BISP Interoperability Project In Pakistan Nationwide

easypaisa digital bank becomes the first Acquirer Bank to go live on the BISP Interoperability Project, enabling beneficiaries to withdraw payments through participating bank retailers.

UBL National Innovation Hackathon 2026 Concludes With FinTech Solutions And Emerging Technology Talent

UBL National Innovation Hackathon 2026 concludes with 25 finalist teams showcasing AI, fintech, open banking and digital banking solutions.

Topics

ABHI Microfinance Bank Crosses PKR 7 Billion Digital GLP Milestone Amid Continued Digital Banking Growth

ABHI Microfinance Bank crosses PKR 7 billion in Digital GLP, highlighting customer trust and continued growth across its digital banking journey.

NayaPay Partners With Kalorist To Offer 80% Discount On Subscription Plans For Cardholders Across Pakistan

NayaPay has partnered with Kalorist to offer cardholders an 80% discount on one-month and three-month subscription plans, subject to terms and conditions.

1LINK Sponsors International Information Security Conference To Highlight Cybersecurity Across Pakistan Financial Ecosystem

1LINK sponsors the 18th International Information Security Conference in Karachi, focusing on cybersecurity, data sovereignty and security challenges in banking.

Easypaisa Digital Bank Becomes First Acquirer Bank Live On BISP Interoperability Project In Pakistan Nationwide

easypaisa digital bank becomes the first Acquirer Bank to go live on the BISP Interoperability Project, enabling beneficiaries to withdraw payments through participating bank retailers.

UBL National Innovation Hackathon 2026 Concludes With FinTech Solutions And Emerging Technology Talent

UBL National Innovation Hackathon 2026 concludes with 25 finalist teams showcasing AI, fintech, open banking and digital banking solutions.

HBL Microfinance Bank Goes Live As BISP Agent Interoperability Issuer Across Pakistan

HBL Microfinance Bank goes live as an issuer under BISP Agent Interoperability, expanding beneficiary access through partner-bank networks.

JazzCash Launches Digital Committee Feature To Simplify ROSCA Management For Users Across Pakistan

JazzCash launches Committee, a digital ROSCA feature allowing users to manage contributions, payments and group communication through its app.

SBP Promotes Hybrid Cloud Adoption To Advance Pakistan Digital Financial System

SBP highlights hybrid cloud adoption as a key step toward digital financial services, stronger data control and cybersecurity in Pakistan.
spot_img

Related Articles

Popular Categories