Is income tax deducted from my payouts when I sell through Foodpanda or other delivery apps?

Money a restaurant earns from app orders is taxed differently from money it takes over the counter. Since the Finance Act, 2025, the Income Tax Ordinance, 2001 has a separate charge on payments for digitally ordered goods and services, collected by whoever handles the money between the customer and the seller.

What does the law say?

Two provisions work together.

Section 6A is the charging section. It imposes tax, at the rate in Division IVA of Part I of the First Schedule, on every person who receives payment for supply of digitally ordered goods or services delivered from within Pakistan using locally operated online platforms, including online marketplaces or websites. Section 6A(2) applies the rate to the gross amount of the receipts.

Section 153(2A) is the collection section. It requires:

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

to collect tax from the gross amount payable to the seller, including sales tax if any, and deposit it in the government treasury.

Section 153(7) defines “courier service” to include logistics services, ride-hailing services, “food delivery platforms” and e-commerce services. It defines “payment intermediary” as a third party such as a bank, financial institution, exchange company or payment gateway that facilitates the transfer of funds without being the ultimate source or recipient of the payment.

What are the rates for tax year 2027?

How the customer pays	Who collects	Rate
Digital means or banking channels	Payment intermediary	1% of gross amount paid or payable
Cash on delivery	Courier service	2% of gross amount paid or payable

The same two rates appear in Division IVA of Part I and in clause (3A) of Division III of Part III of the First Schedule. Section 153(2A) points to Division IVA; clause (3A) also refers to payments under section 153(2A). The figures match, so the cross-reference does not change the amount.

How does it work in practice?

The app or the payment processor keeps back the tax from what it passes on to the restaurant and deposits it. The restaurant receives its payout net of that tax. Section 181(1A) adds that an online marketplace or courier service shall not allow any vendor to use its platform for e-commerce transactions unless the vendor is registered under the Ordinance.

Section 8 makes tax imposed under section 6A a final tax on the amount it is charged on. Section 6A(3), added by the Finance Act, 2026, changes that for a person whose turnover in a tax year exceeds Rs. 200 million: for them the tax is adjustable. A person with turnover up to Rs. 200 million may opt out of the final tax regime when filing the return for tax year 2027 and later years.

Worked example (illustrative figures)

Zaiqa Kitchen, a cloud kitchen in Gulshan-e-Iqbal, Karachi, sells only through a delivery app. In one month its app orders total Rs. 500,000, including any sales tax. Customers paid Rs. 300,000 by card or wallet and Rs. 200,000 in cash to the rider.

• Digital payments: 1% x Rs. 300,000 = Rs. 3,000.
• Cash on delivery: 2% x Rs. 200,000 = Rs. 4,000.
• Total tax collected for the month: Rs. 3,000 + Rs. 4,000 = Rs. 7,000.

If every order had been paid digitally, the tax would have been 1% x Rs. 500,000 = Rs. 5,000, which is Rs. 2,000 less.

What does the law not spell out?

Several points that matter for restaurants are not settled in the text:

• Whether every app is “locally operated”. Section 6A and section 153(2A) apply to locally operated platforms. The Ordinance does not define that phrase.
• Who collects on digital payments. The duty falls on the “payment intermediary”. Whether that is the app itself or the bank or gateway behind it depends on how the payment is routed, and the text does not name food apps in that definition.
• The base when the app keeps a commission. The tax is on the “gross amount payable” to the seller under section 153(2A) and on gross receipts under section 6A. The Ordinance does not say how an app commission deducted before payout is treated in that base.

Where the law is silent, this page does not fill the gap.

What if I also sell at the counter?

Section 6A reaches only payments for digitally ordered goods or services delivered through online platforms. Dine-in, takeaway and phone orders are outside it and are taxed under the ordinary rules for business income, which this page does not cover.

Common mistakes

• Reading the deduction as the app’s fee. The 1% or 2% is income tax collected under section 153(2A), separate from any commission the platform charges.
• Assuming the tax is always final. Above Rs. 200 million turnover it is adjustable under section 6A(3), and smaller sellers may opt out from tax year 2027.
• Selling on an app without registering. Section 181(1A) bars platforms from letting unregistered vendors trade.

What to check in the official text

Read sections 6A, 8, 153 and 181 of the Income Tax Ordinance as amended to 30 June 2026, with Division IVA of Part I and clause (3A) of Division III of Part III of the First Schedule. Sales tax on restaurant services is levied by the provinces and, in Islamabad, under the ICT (Tax on Services) Ordinance; provincial laws are outside this corpus.