Pakistan says decision to roll back digital tax on foreign retailers to boost e-commerce sector

KARACHI: A senior Pakistani finance official said on Friday the government had decided to roll back a recently imposed digital tax on foreign retailers in an effort to promote e-commerce in the country.

The Federal Board of Revenue (FBR), the government’s tax collection body, reversed this week a set of measures introduced in the federal budget that were aimed at regulating cross-border online purchases and affected international firms like China’s Temu, Shein and AliExpress.

These included a five percent fixed tax on digital platforms and a sharp reduction in the duty-free threshold for imported parcels, slashing it from Rs5,000 ($18) to Rs500 ($1.8).

“The government plans to continue expanding the e-commerce sector by keeping the market open to international players,” Finance Adviser Khurram Schehzad told Arab News.

The move has sparked backlash from local retailers, who argue that the policy puts them at a disadvantage.