Pakistan Senate panel recommends eliminating sales tax on stationery

Pakistan’s Senate Standing Committee on Finance and Revenue on Sunday recommended reducing the sales tax on stationery items from 10% to zero, following concerns raised by the Stationery Association.

Representatives of the association informed the committee that the Federal Board of Revenue (FBR) imposed a 10% sales tax on stationery items, including books, pens, and paper, in the previous fiscal year’s budget. They noted that these items had been exempt from sales tax since 1954, until the exemption was withdrawn.

The committee endorsed the association’s appeal and recommended the FBR restore the zero-rated status on stationery items.

The committee also approved a proposal to impose sales tax on e-commerce goods. FBR Chairman Rashid Mahmood Langrial explained that although sales tax is collected from consumers during online purchases, it is often not deposited with the FBR. To address this, courier services will now act as collection agents, as they hold the relevant seller invoices. Sales tax, however, will not apply to locally provided services.

Under the new Finance Bill, all digital vendors, including non-resident businesses, must register in Pakistan if they sell goods online through websites, apps, or marketplaces.

The committee reviewed proposed laws requiring registration for anyone selling goods digitally to Pakistani consumers. Members expressed concern about the burden on small or occasional online sellers. Chairman Langrial assured the committee that housewives and individuals making one-time sales would be exempt from registration and enforcement actions.