ISLAMABAD (Kashmir English): In a major relief for online shoppers, the Pakistani government has removed the recently imposed 5% digital tax on international platforms like TEMU, SHEIN, and AliExpress. The decision is effective retroactively from July 1, 2025.
This move comes as part of the government’s efforts to strengthen international trade relations, particularly with the United States. The Federal Board of Revenue (FBR) issued an official notification suspending the tax under the Digital Presence Proceeds Tax Act, 2025.
The 5% tax was originally placed on digital purchases from foreign platforms like TEMU, resulting in noticeable price increases for Pakistani customers. However, with the tax now lifted, buyers are expected to see slight price relief while shopping on TEMU and similar websites.
“In exercise of the powers conferred 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 chargeable to tax under the said Act,” according to a notification issued by the Federal Board of Revenue (FBR).
Despite this change, the 18% general sales tax on imported goods still applies. This means that while prices may come down a bit, they won’t return to pre-tax levels entirely.
The tax removal isn’t just limited to US-based platforms. It applies across the board to all international digital sellers operating in Pakistan. However, platforms like TEMU are expected to benefit the most, as they are popular among local consumers for their affordable and diverse product range.
In a statement, an FBR spokesperson said, “This exemption supports our goal of strengthening cross-border trade and giving local consumers better access to international e-commerce platforms like TEMU.”
The removal of the digital tax is expected to have a positive impact on Pakistan’s online shopping sector, which has seen rapid growth in recent years, with TEMU becoming a go-to platform for thousands of buyers nationwide.
