The Federal Board of Revenue (FBR) has announced the removal of the five percent tax previously imposed by the federal government on foreign goods purchased through online shopping platforms. According to reports, the tax repeal took effect on July 31, 2025, with experts predicting a drop in prices.

 

The FBR issued an official notification highlighting the removal of the additional tax on digital goods and services. As per reports, purchase from top online retail services such as SHEIN, AliExpress and Temu will no longer be subject to higher taxes, allowing more affordable goods to enter Pakistan.

 

However, the prices on these platforms are unlikely to return to pre-budget levels. According to the FBR, the 18 percent general sales tax (GST) levied on all imports of digital goods and services in the budget for fiscal year (FY) 2025-26 has not been repealed.

 

The removal of the five percent additional tax on digital imports is expected to be good news for online shoppers. The imposition of GST and this extra tax had previously frustrated customers, as it caused the prices of goods previously affordable to increase sharply.

 

As a country with a low average national income, the trend of shopping for goods online has reportedly been increasing in Pakistan, especially among younger buyers. Platforms like SHEIN, AliExpress, and Temu have each gained a large share of the Pakistani market as their products are often priced lower than their counterparts available in the domestic market.

 

Moreover, details from reports suggest that these platforms often provide more variety to consumers in comparison to local markets. For example, SHEIN has a vast array of clothing choices, which many Pakistani consumers consider to be unparalleled when compared to the variety available at local clothing outlets. Similarly, AliExpress and Temu provide online buyers with everything from gadgets to home decor.