Asian Development Bank recommends 5pc GST on digital transactions

The Asian Development Bank (ADB) has advised Pakistan to implement a uniform 5 per cent general sales tax (GST) for all digital transactions to encourage nationwide adoption of e-commerce platforms, reduce cash-related inefficiencies and document the economy. In its latest report on Pakistan’s Digital Ecosystem issued yesterday, the ADB cautioned that steep and inconsistent taxes on digital infrastructure in the country pose a serious risk to foreign investment, growth, and the expansion of digital services. “Pakistan’s digital infrastructure faces a major challenge from high taxation. Taxes on this sector, both federal and provincial, are some of the highest globally and regionally, and the tax policies tend not to be very consistent,” the report said. “The cost of service provision exacerbates the digital divide, especially for women and marginalised groups, who face asymmetric cost and cultural barriers to accessing the internet.”