A Sigh of Relief for Online Buyers in Pakistan – 5% Tax Relief permitted to Pakistani Shoppers
In a boost for cross-border e-commerce shoppers, the Government of Pakistan has finally abolished the much-criticized 5% tax on online international purchases. Online platforms like Temu, SHEIN, and AliExpress popular among Pakistani youth and price-sensitive shoppers are likely to emerge with slightly lower prices.
The ruling, which was upheld in an official notice sent by the Federal Board of Revenue (FBR), follows weeks of public and consumer ire. The new tax, announced in the latest federal budget, had resulted in the increase in prices on international online shopping websites and sparked an outpouring of anger among consumers.
Why Was the 5% Tax Removed?
The 5% tax was initially introduced as part of the government’s larger initiative to boost revenue from digital imports. It soon attracted criticism for disproportionately hitting middle- and lower-income buyers who depend on these platforms for affordable clothes, accessories, gadgets, and everything else.
The rollback was fuelled by rising public pressure, social media protests, and an appreciation for the increasing prevalence of online shopping in the everyday lives of Pakistanis, said economic observers. E-commerce has boomed, especially post-pandemic, and such taxation was viewed as regressive in today’s economic environment.
What Does This Mean for Shoppers?
Although the elimination of the 5% tax is good news, consumers should not get too excited. The 18% sales tax on imported items is still in place. That means that although prices will slightly decrease, they will not go back down to the lower prices of pre-federal budget.
For example, a $20 product from SHEIN that once used to have an extra $1 (5%) tax imposed on it could now be sold for a little less. But since the 18% sales tax is retained, the total cost will still contain approximately $3.60 in tax leaving the ultimate price around $23.60.
In spite of this, the majority of consumers think that it is a step in the right direction. “At least the government is hearing us out,” said Mahnoor Ahmed, a university student. “I shop online for most of my clothing items at AliExpress, and even a minor tax change impacts my entire shopping list.”
E-Commerce in Pakistan: Still Growing Strong
Despite the remaining taxes, Pakistan’s e-commerce industry continues to grow. Temu and SHEIN, especially, have witnessed rising traffic from Pakistan because of their reasonable pricing and fashionable product offerings. AliExpress is a name that has been familiar to everyone for a long time with its tech accessories and home products.
Online payment channels, enhanced logistics, and efficient customs clearing processes have also powered this growth. Nevertheless, uniform tax policy continues to be a deciding factor in maintaining the momentum.
Will the 18% Sales Tax Also Be Reviewed?
There is increasing speculation that the 18% sales tax may also be reviewed in the future if economic circumstances permit. Currently, however, the FBR has not indicated any further relief.
Specialists recommend cutting taxes on electronic imports to increase consumption at home, promote legal transactions, and ultimately enhance the government’s collection through greater volumes instead of greater rates.
For the present, elimination of the 5% tax is a small but significant win for Pakistan’s internet buyers. Prices will not have an overhaul per se, but the relief demonstrates a more consumer-centric move by the government in the online space. As cross-border e-commerce develops further, policy changes like this will go a long way in molding Pakistan’s digital economy.
**Focus Keyword:** *foreign online shopping Pakistan*
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