Pakistan withdraws 5% digital tax on Temu and other online shopping platforms

The Federal Board of Revenue (FBR) has withdrawn the five percent tax on foreign online shopping platforms and tech companies.

The rollback is expected to ease the prices of online products for thousands of buyers in Pakistan, especially those who frequently order clothing, gadgets, and accessories from international shopping platforms.

According to a notification issued by the tax collection body, the tax introduced under the Digital Presence Proceeds Tax Act 2025 will no longer apply to goods and services digitally ordered from abroad.

The change takes effect from July 1, 2025.Pakistani art and craftsBest clothing retailers

The move comes after widespread complaints from consumers who noticed that prices of many items on platforms like AliExpress, Shein, and Temu had almost doubled following the tax’s introduction.

Read more: FBR to seize cigarettes without tax stamps across country

As a result, many had shifted back to local platforms like Daraz. However, with the withdrawal now in place, prices on international platforms are expected to reduce from Friday, potentially reviving interest in international online shopping.

The FBR stated that the federal government, exercising powers under Section 15 of the Digital Presence Proceeds Tax Act, had decided that the tax would not apply to any person supplying goods or services from outside Pakistan under the Act.