“The hardest thing in the world to understand is income tax.” (Albert Einstein).
Pakistan is struggling in the journey of development and its E-commerce platform has paved the way for inclusive trade and economic development.
This economic development is also improved by Pakistan’s digital Goods or digital products.
What are Digital goods?
Digital products or Electronic goods are non-physical goods that exist in digital forms. These digital goods can be sold and purchased online without the need to fill up the list again.
All kinds of digital products have their own importance and benefits. Some are easy to do while some require a lot of time and effort.
Some digital goods remain valuable for long terms while others disappear quickly.
Some digital products are once done while others require Maintenance and updates.
Examples of Digital goods
Digital goods are enabled products or services that offer some forms of utility to a Human being. Here is the list of Digital goods
I program or courses
Xi DIY Printable
Xiv web elements
Digital goods also include e-books, Online courses, PDF , Videos, Music files, Software, website templates, graphics images and many more.
What is meant by TAX?
A word Tax originated from Latin word TAXO which means that tax is a Compulsory demand by the government organization on a taxpayer or worker’s income and profit in order to pay various funds of a state.
Every nation and state needs to develop itself in every means. To make welfare state funds are collected to make healthy and strong economics. In order to compete with other national government take loans from different sources but that is not enough so to fulfill governments requirements government take funds in the name of taxes either Direct and indirect taxes.
Taxes are basically the funds in the name of Income-tax or GST etc. Tax is a penalty which is compulsory paid by the worker or businessmen to the government.
Imposing Digital Tax in Pakistan
The Current budget 2019-2020 Federal Board of Revenue (FBR) has been proposed to implement a 30 percent tax on Digital Goods.
FBR in its current budget introduced 30 percent initially tax on the digital market and products on the suggestion and recommendation of ICAP (Institute of Chartered Accountants of Pakistan). This tax should be imposed on foreign state companies that are not established in Pakistan so the tax should be imposed on only their income from the advertisement in Pakistan.
Digital taxation is imposed to protect legal Concerns
The volume of E-Commerce as a proportion of retail trade continues to increase around the world day by day. By taxing e-commerce sales government is protecting local providers of competing services.
Taxation on Digital goods Goals
The Goals of this taxation is to promote self responsibilities in public and to improve and maintain Infrastructure.
- I) Strengthen Foreign policy
By imposition of tax on digital goods in Pakistan, we can firm our economy by a foreign currency which leads to value up our country’s currency.
- ii) The interest of mega-corporation in Pakistan’s e-commerce
Many international mega-corporations like are entering Pakistan’s Marketplace so the policy of tax can also facilitate entry of other entities.