Courier companies increase in delivery charges after new taxes

Courier companies across Pakistan have announced that they will begin deducting new government taxes on Cash on Delivery (COD) parcels starting July 2025. This decision comes after new rules were introduced in the Finance Bill 2025, which make courier services responsible for collecting taxes from online sellers.

As per the notification sent to their clients, couriers will now deduct 2% withholding tax and 2% sales tax from each delivery and submit it to the government on behalf of the seller. This means online sellers and E-commerce businesses will see a portion of their earnings deducted automatically during deliveries.

Courier operators have also instructed all sellers to register with the Federal Board of Revenue (FBR) for both sales tax and income tax. Sellers who are not registered will not be able to use courier services for delivering their products. This step is part of stricter government regulations aimed at bringing more online businesses into the tax net.

With over 2,000 courier companies working across Pakistan—including well-known names like TCS, Leopards, Pakistan Post, DHL, M&P, Call Courier, and Trax—this new rule will have a wide impact on the E-commerce sector, which has grown rapidly in recent years.

According to Shoaib Bhatti, president of the Pakistan E-commerce Association (Karachi Chapter), these new taxes will negatively impact small and medium-sized online businesses. While big companies might manage the added costs, smaller sellers may be forced to increase prices for customers to survive.

He also noted that other rising costs—like fuel, electricity, and internet—are already reducing profits for online sellers. Now, with higher delivery charges likely, customers could also feel the burden.

The State Bank of Pakistan (SBP) says that nearly 8,000 E-commerce sellers are registered with banks. However, the FBR has clarified that small home-based sellers and women working from home will be exempt from the new registration requirements.

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