Higher Tax on COD Payments vs Digital Transactions in Budget FY26

According to Bilal Azhar Kayani, Minister of State for Finance, there will be distinct tax rates for payments made in cash versus digital methods. Initially, the government proposed a tax ranging from 0.25% to 2% on COD transactions. The Federal Board of Revenue (FBR) expects to collect about Rs. 59 billion through this tax measure during FY2025-26.

Concerns from Lawmakers on COD Tax Implementation

Committee Chairman Syed Naveed Qamar and other lawmakers expressed concerns regarding the practical implementation of these taxes. They emphasized the need for clear safeguards and reasonable thresholds to protect small businesses. Lawmakers urged the FBR to avoid imposing unfair burdens on small sellers, ensuring the tax system remains fair.

For more details on the Budget FY26 and other tax updates, visit our Taxation News section.