In a move that will bring much-needed relief to online shoppers across Pakistan, the federal government has officially withdrawn the recently imposed tax on online shopping platforms such as Temu, SHEIN, and AliExpress. The decision comes as part of a broader effort to strengthen trade ties with global partners, including the United States.
The development follows the implementation of the Digital Presence Proceeds Tax Act, 2025, which had previously introduced a 5% levy on digitally ordered goods and services supplied by foreign tech companies. However, according to a fresh notification by the Federal Board of Revenue (FBR), this tax on online shopping will no longer apply to international sellers delivering to Pakistan.
“In exercise of powers granted under section 15 of the Digital Presence Proceeds Tax Act, the federal government has decided that this tax shall not be applied to cross-border digital sales from any foreign entities,” the notification read.
The change is effective from July 1, 2025, aligning with the new fiscal year. The timing is crucial, especially considering that the recent budget had triggered sharp price hikes across various online marketplaces due to the added tax burden. With the removal of this tax, consumers can expect noticeable price drops, particularly in fashion, electronics, beauty, and lifestyle segments—categories popular on platforms like SHEIN, Temu, and AliExpress.
Impact on Online Marketplaces and Users
This policy shift not only benefits end users but also supports smoother digital trade operations for international sellers. As online marketplaces grow in popularity in Pakistan, regulatory clarity and tax relief can enhance consumer trust and purchasing power.
Shoppers who had held back their spending after the budget announcement are now likely to resume buying from global e-commerce platforms. Additionally, this move signals Pakistan’s willingness to align with global trade norms and create a more conducive environment for cross-border e-commerce.
Industry analysts suggest that this exemption could pave the way for more international players to re-enter or expand their services in Pakistan, thereby increasing competition and improving customer choice on various online marketplaces.
By lifting the 5% tax on online shopping, the government has not only responded to consumer demand but also taken a strategic step toward fostering international digital trade. Temu, SHEIN, and AliExpress are anticipated to gain popularity among Pakistani consumers again, and in the upcoming weeks, costs are probably going to decrease.
This tax reform illustrates a forward-thinking approach that supports digital commerce while strengthening global partnerships—especially those with countries heavily involved in e-commerce exports.
