An e-commerce business is like any regular business, and the same taxes are applied to it, which are used to any business that is GST 17%? But since all new businesses are exempt from taxes for 5 years when they start. You don’t need to pay anything for the first 5 years in an e-commerce business. E-commerce business is the best available option for the COVID-19 situation. Ecommerce Businesses help boost the GDP of the country. However, Many experts demand Tax Relief to Boost E-Commerce in Pakistan.
Representatives from the public and private sectors also civil society organizations said. This while is sharing their views with the participants at ‘E-commerce-the scope and facilitation’ organized by the Sustainable Development Policy Institute (SDPI).
Whether you sell to customers in Pakistan or outside, a GST registration is now a must. Since GST is a charge to Pakistani residents, you do not charge it while sending products outside Pakistan. You have to decide whether your organization wants to collect GST or not; that’s a business decision. If you can file GST properly and regularly, then go for it.
If you are in the services industry, GST would be 6%.
Hassan Bano Burki, Chief of Party at USAID, supported Pakistan Regional Economic Integration Activity (PREIA). He said that the timely implementation of the e-commerce policy could allow the Pakistani market to benefit from the opportunities in the digital space available to local and foreign firms.
Dr. Vaqar Ahmed, Joint Executive Director, SDPI, believed that the E-commerce industry in Pakistan has observed over 90% growth in 2019. However, During this COVID-19, e-commerce business profit also decreases. He said the government should support e-commerce businesses and give relief in taxes. It helps e-commerce to boost the economy of the country.
He added that people still have trust issues in online payments. He said that a complicated tax regime is a barrier to the sector’s growth and new firms that try into it. All provinces have a different GST regime, resulting in multiple taxation layers that hurt the taxpayer. According to expert, relief in tax help boosts E-Commerce.
Ministry of Commerce
Aisha Moriani, Joint Secretary Ministry of Commerce (MoC), told the participants that the Cabinet had approved an e-commerce policy. The ministry is now working with the e-commerce industry stakeholders to timely implement the policy.
She said this policy trained to reduce the cost of doing business for e-commerce firms. She added that e-commerce initiatives would help export enterprises better connect with the rest of the world through online marketing and financial channels.
Gonzalo Valera, Senior Economist at World Bank, said that World Bank is keen to help the Ministry of Commerce with e-commerce reforms. However, he observed that Pakistan has one of the lowest internet penetrations, hindering it from achieving potential e-commerce gains.
According to FBR
Afnan Khan from the Federal Board of Revenue (FBR) informed the participants that FBR is making efforts to promote Pakistan National Single Window’s implementation. A commitment under the International Trade Facilitation Agreement. FBR expects an initial version of the National Single Window to be launched by December 2020.
Pervez Iftikhar, Member of the Prime Minister Taskforce on IT Sector, said that taxes on the use of the internet are wrong, and any tax levied on the online or web-based activity should be in line with peer economies.
According to the current situation, the government should facilitate online business and tax relief in e-commerce stores. E-commerce is an online way to increase the export of the country. Boosting & growing E-Commerce helps increase the Pakistani economy by increasing competition, lowering prices, and increasing productivity, creating downward inflation. However, The e-commerce world is eco-friendly since it dematerializes the retail process and uses economically efficient delivery services.