ISLAMABAD: In its FY 2025 26 budget, the federal government has declared to introduce a 5 percent tax on online educators and digital academies.
The new tax will be used to target individuals and institutions that provide educational services via digital platforms (such as online tutoring, e-learning portals, and online and virtual academies, etc.). The move is designed to put the fast-growing digital learning industry in the formal tax nets.
As stated by Federal Board of Revenue (FBR), the tax will be charged at its source by banks and payment gateways. The authorities believe that the action can raise billions of dollars every year.
However, some say that this tax may suppress the small scale educators and economically block the EdTech sector, which has grown very much in the recent years because of the flexibility of learning.
This tax will be operational once Parliament approves of it in the next budget session. More implementation guidelines will come up in the near future.
