Consumer Relief : Pakistan Government Removes Digital Tax!
Online Shopping Gets a Boost: Pakistan Rolls Back Digital Tax on International Platforms
Good news for online shoppers across Pakistan! The sticker shock that hit product prices on popular global marketplaces such as Temu, SHEIN, and AliExpress after the recent budget is expected to ease significantly. This welcome change comes as the federal administration has officially rescinded the 5% levy it had previously introduced on foreign tech companies and digital platforms for supplying online-ordered goods and services.
“In exercising the authority granted by section 15 of the Digital Presence Proceeds Tax Act, 2025, the federal government is pleased to direct that the Digital Presence Proceeds Tax shall not apply to digitally ordered goods and services supplied from outside Pakistan, by any person, which are subject to tax under the said Act,” declared a recent notification from the Federal Board of Revenue (FBR).
This strategic decision by the government, reportedly influenced by efforts to finalize a trade agreement with the U.S., will also extend its benefits to other international companies. This move is particularly advantageous for platforms like Temu, SHEIN, and AliExpress, among others, making cross-border online shopping more accessible.
Crucially, the removal of this 5% tax is effective retroactively from July 1, 2025, aligning with the enforcement date of the new law and the 2025-26 fiscal year budget. It’s worth noting that alongside this 5% tax, an 18% sales tax was also levied on these online platforms, a detail extensively covered by channels like MoBiHuT on YouTube in their earlier analyses.
While the elimination of the 5% tax is set to bring down prices on these platforms, it’s important to understand that the overall costs will not return to pre-budget levels, primarily due to the ongoing 18% sales tax still in effect. Nevertheless, this is a positive development for consumers looking for more affordable international online purchases.
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