The Federal Board of Revenue (FBR) has announced a new regulation setting a transaction limit of Rs. 200,000 for cash payments made for e-commerce “Cash on Delivery” (CoD) orders. This move, communicated through Circular No. 02 of 2025-26 (Income Tax) dated August 12, 2025, forms part of the government’s ongoing efforts to promote a cashless economy and encourage digital financial transactions across Pakistan.
According to the FBR, the same limit that applies to cash payments at retail outlets will now be enforced for CoD orders in the e-commerce sector. This alignment with Section 21(s) of the Income Tax Ordinance, 2001, ensures consistency across all cash-based transactions, whether conducted in physical stores or through online platforms. By applying this ceiling to CoD orders, the government aims to reduce the widespread use of cash in large-value transactions, which has often been associated with tax evasion and a lack of financial transparency.
The introduction of the Rs. 200,000 cap on cash payments for CoD orders is expected to have multiple benefits. First, it will encourage consumers and businesses to adopt digital payment methods, such as credit and debit cards, mobile wallets, and other online payment systems.
This will not only facilitate faster and safer transactions but also create a more traceable and transparent financial ecosystem. Secondly, the limit is designed to curb potential misuse of the cash payment system, which can make it difficult for authorities to monitor high-value transactions and ensure proper tax compliance.
E-commerce platforms are now expected to adapt their payment systems to comply with the FBR’s guidelines, providing users with options to complete purchases electronically once the cash payment exceeds the prescribed limit. This measure reinforces the government’s broader digitalization strategy, which seeks to modernize Pakistan’s economy, strengthen tax collection mechanisms, and promote financial accountability.
Overall, the FBR’s decision reflects a significant step toward integrating the rapidly growing e-commerce sector into the formal economy while simultaneously supporting the nationwide push toward a cashless, digitally empowered society. By limiting cash payments for high-value CoD orders, the government aims to enhance transparency, protect consumers, and reduce tax evasion, all while encouraging the adoption of safer, more efficient digital payment channels.
