ISLAMABAD: The Senate Standing Committee on Finance has approved several key amendments under the Finance Bill 2025, including tough penalties for online businesses that fail to register with the Federal Board of Revenue (FBR).
During the committee meeting chaired by Senator Saleem Mandviwalla, FBR Chairman Rashid Mahmood Langrial said that under the proposed law, all online businesses—whether local or overseas—must register with the FBR. Non-compliance will lead to strict actions, including freezing of bank accounts, restrictions on property transfers, and sealing of the business.
“Online businesses that are not registered will not be allowed to sell their products online,” Langrial said during a clause-by-clause briefing. He added that even using a registered platform will not be allowed for unregistered businesses.
If a business fails to register, FBR will first freeze its bank accounts. If the business still does not comply, its immovable property transfer will be blocked and eventually, the business itself will be sealed.
The FBR clarified that food items sold online will remain exempt from tax, and no sales tax will be applied to online services across the country, including Islamabad.
However, online businesses will be charged a 2% tax based on their customer invoices. Banks and courier companies will act as collection agents. Langrial said many online businesses were collecting 18% sales tax from customers but not depositing it with the FBR—causing massive tax evasion.
To prevent tax theft via e-commerce, the bill proposes that online platforms must file monthly sales tax returns. Failure to file will result in a fine of Rs 500,000 for the first offense and Rs 1 million for the second. This proposal was approved by the committee.
Additionally, platforms that allow unregistered sellers to use their services will be fined up to Rs 1 million.
The budget also includes new rules for chilling charges on cold items like mineral water, beverages, and fruit juices. Retailers and chain stores will be allowed to charge an extra 5% on these products, which will also be taxed by the FBR.
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On import duties, the bill proposes that customs valuation for imported goods should not exceed 130% of the assessed value when sold in the local market.
The FBR also proposed stricter penalties for tax fraud. Anyone involved in tax fraud could face jail time. While the finance bill suggests a punishment of up to 10 years imprisonment and a fine of up to Rs 10 million, the committee has recommended setting a minimum sentence of at least one year.
The bill also includes a measure to broaden the tax net by requiring data on sales made to unregistered persons to be submitted to the FBR.
