June 18, 2025 – The Federal Board of Revenue (FBR) has proposed new taxes on e-commerce and foreign digital companies like Google and YouTube, expecting to collect Rs65 billion in the next fiscal year.
Key Tax Changes:
- Higher Tax on Foreign Digital Services (Rs39 billion expected)
- Current tax: 10% on companies like Google, YouTube, and Netflix.
- New tax: 15% – to encourage these companies to open offices in Pakistan.
- New Tax on Online Shopping (Rs26 billion expected)
- Both income tax and sales tax will apply to local e-commerce businesses.
- Other Major Tax Changes
- Solar Panels: 18% sales tax (could bring Rs20 billion, but PPP opposes it).
- Small Cars (850cc): Higher tax – Rs7 billion expected.
- Bank Interest Earnings: Increased tax – Rs56 billion expected.
- Pension Tax: New tax – Rs2 billion expected.
Why These Changes?
- The government needs more money to fund its budget.
- Foreign digital companies make profits in Pakistan but pay little tax.
- Online shopping is growing fast, and the FBR wants a share.
What’s Next?
- Parliament must approve these taxes.
- If the solar panel tax is rejected, the government will find other ways to collect Rs20 billion.
