The federal government has cancelled the 5 per cent tax it had imposed on foreign platforms, including Temu, SHEIN, and AliExpress. The prices on these platforms had risen after the tax was introduced in the 2025–26 budget. This removal is likely to lower the prices again, though not to the earlier levels.
The decision is part of efforts to make trade easier with the U.S. The tax cut will benefit all foreign tech firms and online platforms that offer digitally ordered goods and services. The tax had been added under the Digital Presence Proceeds Tax Act, 2025.
A notification by the Federal Board of Revenue stated, “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.”
The 5 percent tax will no longer apply starting July 1, 2025. That is when the new law and budget officially took effect. The rollback is expected to ease cost pressure on online buyers.
However, prices won’t fall back to pre-budget levels. This is because an 18 percent sales tax is still being charged on the same online services.
So while the tax cut offers some relief, users should not expect major price drops. Still, the decision could help keep e-commerce demand stable and avoid a full-scale slump in foreign online shopping.
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