FBR Reduces Tax on Income from Online Sales


We buy and sell thousands of products daily in the local and international market. This is the way of businesses around the globe since ages but due to recent developments in technology, the trends are changing with time. Now buyers can easily place orders online by choosing a mode of payment, whether through online payment or cash on delivery and the product will be delivered to your home through specific courier services. A few years back no one was ready to take risk of placing orders online because of not having faith on these sites that whether the product is original or not but now the trends are changing and websites are receiving billions of rupees through online orders. This source of selling is more convenient as the seller doesn’t have to establish a point of sale physically and the buyer doesn’t have to reach the seller physically, so it is very much convenient for everyone. Most of the businesses are switching to online selling with time and this also benefits the economy by increasing transactions by doing fewer efforts.

Keeping in view the benefits with reference to the economy FBR has recently announced that 6 percent sales tax will be charged on income through online sales. The standard rate for sales tax is 17 percent but FBR has amended Sales Tax Rules, 2006 through an SRO 180(1)/2019 issued on Monday to facilitate online sales made through websites. Such a website should be registered with FBR through a computerized system by providing domain name, domain name provider, the name of service provider managing the website, addresses of supply centers and warehouses. Moreover, social media portals may also come under this category if they generate revenue via these online platforms.
“Sales made through social media portals shall also be treated as covered under this sub-rule if the same are recorded through a point of sale and relevant provisions are complied with,” FBR added.

Government is hoping that after these tax reforms, more companies will join the group of legitimate business and tax revenue will increase with time.

Leave a Reply

Your email address will not be published. Required fields are marked *