Is more tax deducted from my online sales if I am not on the Active Taxpayers List?

A seller who is not on the active taxpayers’ list pays double the normal e-commerce income tax rate at source. The doubling comes from the Tenth Schedule to the Income Tax Ordinance, which section 100BA makes override the rest of the Ordinance.

What does the law say?

Section 100BA. Sub-section (1) says the collection or deduction of advance income tax, and the computation of income and tax, for a person not appearing on the active taxpayers’ list “shall be determined in accordance with the rules in the Tenth Schedule”. Sub-section (2) gives the Tenth Schedule effect “notwithstanding anything to the contrary contained in this Ordinance”.

Rule 1 of the Tenth Schedule. Where tax is to be deducted or collected under any provision of the Ordinance from persons not appearing on the active taxpayers’ list, “the rate of tax required to be deducted or collected, as the case may be, shall be increased by hundred percent of the rate specified in this Ordinance”. Its provisos set special rates for sections 231B, 236K, 236C, 236G and 236H. None of them concerns e-commerce.

The base rates. Section 153(2A) makes payment intermediaries and courier businesses collect tax from the gross amount payable to sellers of digitally ordered goods or services, at the rates in Division IVA of Part I of the First Schedule:

Payment channel	Rate for tax year 2027, on the list	Rate after rule 1, not on the list
Digital means or banking channels, by payment intermediary	1%	2%
Cash on delivery, by courier service	2%	4%

Exclusions. Rule 10 of the Tenth Schedule lists the taxes to which the Schedule does not apply, including tax under sections 149, 152 (in part), 154, 154A, 231AB, 235 and 236. Section 153 is not listed, so the section 153(2A) collection falls under rule 1.

How does it work in practice?

Section 181A gives the Board power to institute the active taxpayers’ list and says it is “regulated as may be prescribed”. How names are added to the list is set by rules and FBR procedure outside this corpus.

The payment intermediary or courier applies the higher rate at the time of payment. Rule 2 of the Tenth Schedule lets a withholding agent who is satisfied that a person not on the list was not required to file a return under section 114 notify the Commissioner electronically before deducting. If the Commissioner does not pass an order within thirty days, the contention is treated as accepted.

Worked example (illustrative figures)

Kamran sells car accessories from Rawalpindi through his own website and is not on the active taxpayers’ list. In October 2026, which falls in tax year 2027:

• orders paid by card and bank transfer: Rs. 400,000;
• orders paid cash on delivery: Rs. 250,000.

If he were on the list:

Step 1, digital: Rs. 400,000 x 1% = Rs. 4,000.

Step 2, cash on delivery: Rs. 250,000 x 2% = Rs. 5,000.

Step 3, total: Rs. 4,000 + Rs. 5,000 = Rs. 9,000.

Because he is not on the list, rule 1 increases each rate by hundred percent:

Step 4, digital: Rs. 400,000 x 2% = Rs. 8,000.

Step 5, cash on delivery: Rs. 250,000 x 4% = Rs. 10,000.

Step 6, total: Rs. 8,000 + Rs. 10,000 = Rs. 18,000.

The extra income tax collected for the month is Rs. 18,000 minus Rs. 9,000 = Rs. 9,000. Sales tax withheld under the Sales Tax Act is separate; the Tenth Schedule is part of the Income Tax Ordinance and does not change sales tax rates.

What if …?

What if I do not file a return at all? Rule 3 lets the Commissioner make a provisional assessment within sixty days of the due date, imputing income from the tax collected under rule 1 and treating it as concealed income for section 111(1)(d). Under rule 4, that becomes final after forty-five days unless returns for the year and the preceding year are filed within forty-five days of the order.

What if I am on the list but filed late? Section 100BA(1) also mentions persons on the list who did not file by the due date. Rule 1A, which set rates for them, was omitted by the Finance Act, 2026. Rule 1 by its words covers only persons not appearing on the list.

What if I file my return after the deduction? Rule 4(3) makes the tax deducted under rule 1 adjustable against tax payable in the return filed, where returns are filed before provisional assessment or within the rule 4(2) period.

Common mistakes

• Reading 4% on cash on delivery as the normal rate. The Division IVA rate is 2%. It becomes 4% only for a seller not on the list.
• Assuming the doubling covers sales tax. Rule 1 applies to tax deducted or collected under the Income Tax Ordinance.
• Assuming registration alone is enough. Rule 1 turns on appearing on the active taxpayers’ list, not on having an NTN.

What to check in the official text

Read section 100BA, section 153(2A) and section 181A of the Income Tax Ordinance as amended to 30 June 2026, the rates in Division IVA of Part I of the First Schedule, and rules 1 to 4 and rule 10 of the Tenth Schedule. The Second Schedule contains clauses that switch off rule 1 for particular cases, such as clauses (111A) to (111AC) of Part IV. None of those we read concerns e-commerce, but check the Second Schedule for your situation.