Senate panel backs zero tax on stationery, tighter e-commerce regulations

ISLAMABAD: Pakistan’s Senate Standing Committee on Finance has recommended slashing the sales tax on stationery items to zero and endorsed new taxation measures targeting e-commerce, as part of its ongoing review of the Finance Bill for fiscal year 2025–26.

The committee, chaired by Senator Saleem Mandviwalla, met for a third consecutive day to deliberate the proposed budget. The session was attended by Finance Minister Muhammad Aurangzeb, Minister of State for Finance Bilal Azhar Kiyani, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial and other senior officials. 

One of the key recommendations was to eliminate the 10 per cent sales tax currently applied to stationery products. The proposal followed appeals from industry representatives, who argued that high prices were impacting affordability, particularly for students. 

At the same time, the panel approved a proposal to tighten tax enforcement on e-commerce. FBR officials said that while consumers are charged sales tax in online transactions, the collected amount is often not remitted to the government. 

To address this gap, the FBR plans to designate courier companies as tax collection agents, since they hold transaction invoices and can help trace sellers. The new rules will also require all online sellers, including foreign digital platforms, to register with Pakistan’s tax authorities if they sell goods to local consumers via websites, apps or marketplaces. 

However, the proposed changes will not affect providers of locally rendered services. Committee members also raised concerns about the burden on small or informal sellers, such as housewives and individuals making one-off online sales.

In response, Chairman Langrial said that such individuals would be exempt from mandatory registration, and enforcement will focus on regular commercial sellers operating without compliance. 

The committee is continuing its review of various tax measures and revenue proposals under the government’s budget plan for the upcoming fiscal year.

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