Govt Removes Tax Imposed on Platforms Like Temu, SHEIN, AliExpress

Prices of products on online marketplaces like Temu, SHEIN and AliExpress that surged sharply in Pakistan following the budget are likely to come down again. The cut is expected as the federal government has removed the 5 percent tax it had introduced in the budget on foreign tech companies and online platforms for supplying digitally ordered goods and services. “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). The government’s decision, prompted in a bid to strike a trade deal with the U.S., will also be appliable on other foreign companies. This will benefit platforms like Temu, SHEIN and AliExpress to name a few. The tax would be waived starting July 1, 2025, the date when the new law and the 2025–26 fiscal year budget came into effect. It is pertinent to mention here that in addition to the 5 percent tax, an 18 percent sales tax was also imposed on these online platforms, something ProPakistani explained in an earlier post. The removal of the 5 percent tax is expected to bring prices down on these platforms. However, the prices still won’t come down to the pre-budget level due to the 18 percent sales tax.