Who deducts tax from my Daraz or other marketplace payout, and at what rate?

When a marketplace pays you less than the order total, part of the gap may be tax. The law does not make the marketplace the tax collector by name. It puts the collection duty on whoever handles the money: the payment intermediary for digital payments and the courier for cash on delivery. The marketplace’s own legal duty is to report.

What does the law say?

Income tax. Section 153(2A) of the Income Tax Ordinance, “notwithstanding” section 153(1), requires two kinds of businesses to collect tax “from the gross amount payable (including sales tax, if any) to the seller”:

• every payment intermediary processing a payment through digital means on behalf of a seller of digitally ordered goods or services through locally operated e-commerce platforms, including websites; and
• every courier business collecting cash from a buyer under cash on delivery terms on behalf of such a seller.

The rate comes from Division IVA of Part I of the First Schedule: for tax year 2027, 1% of the gross amount for payment through digital means or banking channels by a payment intermediary, and 2% for cash on delivery by a courier service.

Sales tax. Section 3(3)(c) of the Sales Tax Act says that for digitally ordered taxable goods supplied through an online marketplace, website or software application, the liability to collect and pay tax is on the payment intermediary where payment is made digitally, and on the courier where goods are supplied cash on delivery. S. No. 8 of the Eleventh Schedule sets the rate at 2% of the gross value of supplies.

Is the marketplace a collecting agent?

Not by name. Neither section 153(2A) nor section 3(3)(c) lists an online marketplace among the collectors. Section 2(38B) of the Ordinance defines an online marketplace as a platform “that acts as a facilitator in transactions that occur between a buyer and a seller”.

Two definitions in section 153(7) matter here:

• A payment intermediary is a third party, including a bank, financial institution, licensed exchange company or payment gateway, that facilitates the transfer of funds to “enable, process, route or settle payments” without being the ultimate source or recipient of the payment.
• A courier service includes logistics services, ride-hailing services, food delivery platforms and e-commerce services that deliver goods and collect cash on the seller’s behalf.

So a marketplace that runs its own delivery with cash collection, or routes and settles payments itself, may meet one of these definitions for that part of its business. The text does not say so of any named platform, and we do not decide it. What the law is clear on is the channel: digital payment, 1%; cash on delivery, 2%.

What must the marketplace report?

Income tax. Section 165C(2) requires every online marketplace in Pakistan to submit a monthly statement giving, for each vendor on its platform: name, address, sales tax and income tax registration numbers, transaction-level and aggregated monthly turnover, and the amount deposited into the vendor’s bank account. Section 165C(1) separately requires payment intermediaries and courier services that deduct under section 153(2A) to file quarterly withholding statements with each seller’s name, NTN or CNIC, address, invoice details and tax deducted.

Sales tax. The provisos to section 26 of the Sales Tax Act require every online marketplace, and every payment intermediary and courier, to furnish a monthly supplier-wise statement of amount paid and tax due on digitally ordered goods.

Worked example (illustrative figures)

Faisal sells kitchenware on a marketplace from Gujranwala. In September 2026 (tax year 2027) buyers pay Rs. 200,000 by card and wallet, and Rs. 100,000 in cash to the delivery rider.

Step 1, income tax on digital payments: Rs. 200,000 x 1% = Rs. 2,000.

Step 2, income tax on cash on delivery: Rs. 100,000 x 2% = Rs. 2,000.

Step 3, sales tax withheld under S. No. 8 of the Eleventh Schedule: Rs. 300,000 x 2% = Rs. 6,000.

Step 4, total tax withheld: Rs. 2,000 + Rs. 2,000 + Rs. 6,000 = Rs. 10,000.

Commission, shipping and other platform charges in his payout statement are commercial terms. The law does not set them.

Common mistakes

• Assuming one flat rate for all marketplace orders. The income tax rate depends on the payment channel.
• Treating the marketplace commission as tax. Only the amounts collected under section 153(2A) and section 3(3)(c) are tax.
• Assuming unreported sales stay invisible. Section 165C and section 26 require monthly seller-wise reporting.

What to check in the official text

Read section 153(2A) and the definitions in section 153(7), section 165C and section 2(38B) of the Income Tax Ordinance as amended to 30 June 2026, and the rates in Division IVA of Part I of the First Schedule. In the Sales Tax Act, read section 3(3)(c), section 3(7A), the provisos to section 26 and S. No. 8 of the Eleventh Schedule. The prescribed forms for these statements are set by rules outside this corpus.