The federal government has officially abolished the five per cent tax on goods and services ordered digitally from abroad, in a move aimed at easing the cost burden on consumers and benefiting global tech giants such as Google and Chinese e-commerce platform Temu.
The decision was approved by the federal cabinet on Tuesday and confirmed through a notification issued by the Federal Board of Revenue (FBR). The tax exemption is effective from July 1, 2025, under the Finance Bill 2025, which was recently passed by Parliament.
Read More: Fake Solar Panel Imports Mask Rs120bn Laundering
Previously, the tax applied to digital services and online purchases made by Pakistani consumers from international platforms, generating an estimated Rs40 billion annually. Its withdrawal is expected to reduce costs for online shoppers and encourage smoother cross-border e-commerce.
The move comes weeks after Temu, the fast-growing Chinese e-commerce platform, raised prices for Pakistani customers by up to 300% following new indirect taxes on global online sellers. The price surge prompted widespread criticism from consumers and underscored the challenges of the country’s growing digital commerce sector.
Officials suggest the decision may attract more international platforms to Pakistan’s market and reduce friction in online transactions, aligning with the government’s broader digital economy expansion strategy.
