IMF recommends to bring online digital platforms into sales tax net

Islamabad: The International Monetary Fund (IMF) has recommended bringing online digital platforms that transact with consumers in the sales tax net in Pakistan.

All online digital platforms providing facilities to local consumers will be registered for value added tax. All online digital platforms providing digital products, services and facilities to local consumers by non-resident vendors will be registered for Value Added Tax (VAT).

According to the media reports, in some countries all such platforms are acting as intermediaries and there are different types and models of platforms in the online sector.

It is also reported that these include digital platforms that manage transactions between third-party vendors and buyers, provide listening services, and all those who provide digital platform services directly or through third parties.

However, a digital platform does not include a person who operates a website, such as classifieds and advertising websites, etc.

Media reports have suggested that IMF recommendations include non-resident vendors for government departments and agents who are registered and have VAT registration number or special identification number and whose services are provided as business-to-business transactions. And VAT will be applicable on purchases of digital products, services and LVG by non-resident digital platform operators.