FBR Mulls Mandatory Sales Tax Deposit by Online Retailers
BUDGET 2024-25 TAXATION TOP STORIES
FBR Mulls Mandatory Sales Tax Deposit by Online Retailers
May 26, 2024
Islamabad, May 26, 2024 – The Federal Board of Revenue (FBR) is considering a new measure that would require online retailers to deposit sales tax, according to sources within the FBR.
This proposal is part of the tax authority’s suggestions for the upcoming Budget 2024-25.
FBR officials have recommended amending sub-section (3) of section 3 of the Sales Tax Act, 1990. The proposed amendment aims to make it mandatory for online retailers, even those who do not own the goods they sell, to collect and deposit sales tax on behalf of the government. This change specifically targets platforms like Daraz.pk, which would be responsible for collecting sales tax from their customers and ensuring its timely deposit into the national exchequer.
“By amending the Sales Tax Act, we aim to bring more transparency and compliance into the e-commerce sector,” an FBR source stated. “This will ensure that the sales tax collected by online retailers is properly accounted for and deposited, reducing revenue leakage and enhancing government funds.”
The amendment would involve adding a proviso to sub-clause (a) of sub-section (3) of section 3, clearly defining the responsibility of online retailers in the collection and deposition of sales tax. This initiative reflects the FBR’s ongoing efforts to streamline tax collection processes and integrate the rapidly growing e-commerce sector into the formal economy.
