Pakistan, July 2 -- ISLAMABAD - Pakistan's e-commerce sector is facing a sharp rise in operational costs due to new taxes introduced under the Finance Act 2025. Industry experts say the 2% withholding tax and 2% sales tax on Cash on Delivery (COD) shipments have hit logistics expenses hard, forcing many online sellers to reconsider pricing and sustainability.

The Federal Board of Revenue (FBR) has now made courier companies tax collection agents, requiring them to deduct and deposit taxes from sellers. These deductions are being applied directly from seller invoices, placing a burden on especially small and medium-sized enterprises (SMEs) who rely on COD models for business.

Omer Mubeen, Chairman of the Pakistan E-commerce Association (...