# How to start an e-commerce business in Pakistan: registration, tax and payments

URL: https://which.pk/business/guides/ecommerce-business-pakistan/
Author: Ahtisham Imtiaz
Updated: 8 Oct 2026

## Summary

To start an e-commerce business in Pakistan you need an NTN, and most sellers of goods also need sales tax registration, because since the Finance Act 2025 marketplaces and couriers may not serve unregistered sellers. On each domestic sale, the bank or courier deducts income tax (1% for digital payments, 2% for cash on delivery, double for non-filers) and 2% sales tax. For turnover up to Rs 20 crore the income tax is final unless you opt out. Export proceeds are taxed separately.

## Key facts

- Income tax, digital payment: 1% (filer)
- Income tax, cash on delivery: 2% (filer)
- Sales tax withheld: 2% of gross
- Needed to sell: NTN, usually STRN

To start an e-commerce business in Pakistan you need an **NTN** (National Tax Number), and most sellers of goods also need a **sales tax registration (STRN)**. Since the Finance Act 2025, marketplaces and couriers may not serve sellers without them. On every domestic sale, the bank or courier deducts **1% income tax** for digital payments or **2% for cash on delivery** (filer rates, October 2026), plus **2% sales tax**.

**Tax taken from a Rs 10,000 cash-on-delivery order (filer):** Rs 400 (2% income tax plus 2% sales tax, collected by the courier from the gross amount)

## Which business structure should I register for e-commerce?

The e-commerce tax rules apply to "every person" selling online, so you can trade as a sole proprietor, a partnership or a company. A single member company needs one person; a private limited company needs 2 to 50.

A company registered with SECP (Securities and Exchange Commission of Pakistan) gets its NTN through SECP, which passes its details to FBR. A sole proprietor uses their CNIC as their NTN. Compare costs and tax in [business structures in Pakistan](/business/guides/business-structures-pakistan/).

**What about SECP registration above Rs 10 lakh?:** The 2019 e-Commerce Policy said online businesses with sales above Rs 10 lakh a year "will be registered with SECP compulsorily". We found no SECP rule or law change that enforces this as of October 2026. The binding rules we found are the NTN and sales tax requirements below.

## How do I register an e-commerce business in Pakistan?

Two registrations matter, both with FBR (Federal Board of Revenue):

- **NTN (income tax).** Section 181 of the Income Tax Ordinance requires anyone selling digitally ordered goods or services through a marketplace or courier to register. Marketplaces and couriers must not let unregistered vendors use their services. See [how to get an NTN](/business/guides/how-to-get-ntn/).
- **STRN (sales tax).** Section 14(1A) of the Sales Tax Act requires everyone selling digitally ordered goods from within Pakistan through a marketplace, website or app to register. The exceptions are cottage industry and retailers who pay sales tax through their electricity bill. See [what is STRN](/business/guides/what-is-strn/).

Under section 14(1B), a marketplace or courier must not let you sell through it unless you hold an NTN and, where the rule above applies, an STRN.

A **cottage industry** under the Sales Tax Act is a manufacturer with no industrial gas or electricity connection, in a residential area, with no more than 10 workers and turnover up to Rs 80 lakh a year.

## What is the e commerce business tax in Pakistan?

The Finance Act 2025 added a tax on domestic online sales (section 6A). The bank or courier takes it from the gross amount before paying you. Rates as of October 2026:

| Customer pays by | Who deducts | Income tax (filer) | Income tax (non-filer) | Sales tax withheld |
|---|---|---|---|---|
| Card, bank transfer, wallet, gateway | Payment intermediary (bank or gateway) | 1% | 2% | 2% |
| Cash on delivery | Courier | 2% | 4% | 2% |

"Filer" means you're on the ATL (Active Taxpayer List). FBR says the lower rate for digital payment is there to push sellers away from cash. Check yours with [how to check filer status](/business/guides/how-to-check-filer-status/).

**Who counts as the deducting agent?** FBR's circulars say that for your own website or app paid online, the acquiring bank deducts. For a marketplace paid online, the marketplace's bank deducts when it settles with you. For cash on delivery, the courier or delivery aggregator deducts; ride-hailing and logistics firms count as couriers.

## Is the e-commerce income tax final?

It depends on turnover. If your turnover is **up to Rs 20 crore** a year, the section 6A tax is final tax on that income, unless you opt out when filing your return for tax year 2027 or later. Above Rs 20 crore, it is adjustable against tax under the normal rates.

Export proceeds are outside this regime. Goods exports are taxed at 1.25% under section 154, and IT service exports at 0.25% or 1% under section 154A. See [e-commerce export from Pakistan](/business/guides/ecommerce-export-pakistan/).

## Is the 2% sales tax final?

Only for small sellers. The 2% is the final sales tax for cottage industry and retailers other than Tier-1, and they can't claim input tax on those sales.

Everyone else pays sales tax under the normal regime and files sales tax returns. The 2% withheld is adjusted against the output tax due in that return.

## Do I need PSEB registration for an online store?

No, not for selling goods. PSEB (Pakistan Software Export Board) registers IT and IT-enabled services exporters and freelancers. Its benefit is the 0.25% tax rate on IT service export proceeds, against 1% for others. If you also sell software or services abroad, see [PSEB registration](/business/guides/pseb-registration/).

## How can customers pay my online store?

You have two routes, and the tax differs:

- **Digital payment** (cards, bank transfers, wallets through a bank or payment gateway). The law calls these "payment intermediaries". Income tax deducted: 1% for filers.
- **Cash on delivery (COD)**. The courier collects cash and pays you after deducting tax. Income tax deducted: 2% for filers.

Dawn reported in 2019 that about 60% of e-commerce transactions by value were cash on delivery. The 2019 policy aimed to cap COD orders at Rs 10,000 within three years, but we found no rule that enforces that cap. For gateway options for your own site, see [Shopify payment gateways in Pakistan](/business/guides/shopify-pakistan-payment-gateways/).

Every bank, gateway and courier that deducts tax files a quarterly statement with your name, NTN or CNIC and address. Marketplaces, payment intermediaries and couriers also file monthly sales tax statements, seller by seller. So FBR gets a seller-by-seller record of your online sales.

## What does the e-commerce policy require of online sellers?

The Ministry of Commerce's e-Commerce Policy (October 2019) includes a Code of Conduct for e-commerce businesses. Its main points for sellers and platforms:

- Show prices clearly on the site or app, and on packaging and invoices for physical goods.
- Show the seller's name, address, phone and email.
- Show a complaint phone number and email, and acknowledge complaints with a timeline.
- Disclose data protection terms, including where customer data is stored.
- Keep a physical address in Pakistan.
- On a genuine counterfeit complaint, platforms refund the full price and remove the product.

Disputes go to consumer courts under the provincial Consumer Protection Acts (Punjab 2005, Sindh 2015, KP 1997, Balochistan 2003) and the Islamabad Act of 1995. The policy said these laws would be amended to cover online sales; we didn't check whether each province has done so.

**Policy 2.0 is not final as far as we know:** As of July 2025, the Ministry of Commerce was consulting on a draft E-Commerce Policy 2025-30, to go to the Economic Coordination Committee for approval. We found no report of its approval as of October 2026.

More guides: [Daraz vs Shopify vs your own website](/business/guides/daraz-vs-shopify-vs-own-website/), [how to sell on Daraz](/business/guides/how-to-sell-on-daraz/), [freelancer tax in Pakistan](/business/guides/freelancer-tax-pakistan/), [E-commerce & IT export](/business/ecommerce-it-export/).

## Questions people ask

### Do I need an NTN to sell online in Pakistan?

Yes. Since the Finance Act 2025, online marketplaces and couriers may not serve a seller without an NTN, and most sellers of goods also need sales tax registration.

### What tax is deducted on e-commerce sales in Pakistan?

As of October 2026, for filers it is 1% income tax when the customer pays digitally and 2% on cash on delivery, plus 2% sales tax withheld by the bank or courier. Non-filers pay double the income tax rate.

### Is the e-commerce income tax final?

If your turnover is up to Rs 20 crore, it is a final tax unless you opt out when filing your return for tax year 2027 or later. Above Rs 20 crore it is adjustable against your normal tax.

### Do I need to register my online store with SECP?

The 2019 e-commerce policy said online businesses with sales above Rs 10 lakh would be registered with SECP, but we found no rule that enforces it. The legal requirement we found is an NTN and, for most goods sellers, sales tax registration.

## Sources

- [Income Tax Ordinance, 2001 (amended up to Finance Act 2026)](https://download1.fbr.gov.pk/Docs/2026724177725705IncomeTaxOrdinanace2001.pdf), FBR (accessed 8 Oct 2026)
- [Withholding Tax Rates Card, Tax Year 2027](https://download1.fbr.gov.pk/Docs/202681113864992WithholdingTaxRatesCard2027.pdf), FBR (accessed 8 Oct 2026)
- [Income Tax Circular No. 01 of 2025-26](https://download1.fbr.gov.pk/Docs/2025841183918948CircularNo01of2025-26IncomeTax.pdf), FBR (accessed 8 Oct 2026)
- [Sales Tax Act, 1990 (updated up to 30 June 2026)](https://download1.fbr.gov.pk/Docs/20267171373418951SalesTaxAct1990updatedupto30.06.2026.pdf), FBR (accessed 8 Oct 2026)
- [Sales Tax & Federal Excise Circular No. 02 of 2025-26](https://download1.fbr.gov.pk/Docs/202584118361586CircularNO02of2025-26SalesTax&FederalExcise.pdf), FBR (accessed 8 Oct 2026)
- [e-Commerce Policy of Pakistan (October 2019, archived copy)](https://web.archive.org/web/2023id_/https://www.commerce.gov.pk/wp-content/uploads/2019/11/e-Commerce_Policy_of_Pakistan_Web.pdf), Ministry of Commerce (accessed 8 Oct 2026)
- [Cabinet approves first-ever e-commerce policy](https://www.dawn.com/news/1508500), Dawn (accessed 8 Oct 2026)
- [Commerce ministry moves to roll out E-Commerce Policy 2025–30](https://profit.pakistantoday.com.pk/2025/07/13/commerce-ministry-moves-to-roll-out-e-commerce-policy-2025-30/), Profit (accessed 8 Oct 2026)