Karachi, April 22, 2025 – The Institute of Cost and Management Accountants of Pakistan (ICMAP) has presented a comprehensive proposal aimed at incorporating offshore sellers into the General Sales Tax (GST) regime, a move designed to curb tax evasion and level the playing field for domestic businesses.
The recommendation forms part of ICMAP’s official tax proposals for the upcoming federal budget 2025–26.
According to the proposal, ICMAP suggests making it compulsory for offshore sellers to register for GST and account for the tax on low-value imported goods (LVIGs) if their annual sales to Pakistani consumers exceed a defined threshold—proposed at Rs9 million. This measure is particularly focused on cross-border e-commerce operators who often remain outside the local tax radar.
ICMAP has emphasized that the rapid growth of digital marketplaces and online shopping has enabled offshore sellers to bypass GST obligations, resulting in significant revenue leakage for the national exchequer. These practices, it argues, not only strain public finances but also place domestic retailers at a competitive disadvantage.
“This policy initiative will ensure that offshore sellers dealing in low-value imported goods are treated on par with local businesses, thereby broadening the GST tax base,” stated ICMAP in its submission to the government. “It reflects global trends and is essential to addressing the challenges posed by a rapidly expanding digital economy in Pakistan.”
The institute further estimates that implementation of this framework could yield between Rs20 to Rs30 billion annually in additional revenue through proper taxation of offshore LVIG transactions.
Beyond revenue generation, the move is expected to promote fair competition, stimulate domestic commerce, and encourage a more equitable business environment. ICMAP believes this proposal is aligned with international tax practices, especially those adopted by countries seeking to regulate the digital marketplace and prevent profit shifting.
By bringing offshore digital sellers into the GST net, ICMAP asserts that Pakistan can take a decisive step toward modernizing its taxation system and supporting long-term economic sustainability.