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New system of tax deduction on online purchases introduced

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New system of tax deduction on online purchases introduced
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    1. Researcher

      It sounds like you're referring to the new tax deduction system on online purchases—specifically, charges being applied at the time of digital transactions. Here's an overview of what's happening currently in Pakistan: 📌 What Changed: Tax Deductions on Online Purchases A new withholding tax called tRead more

      It sounds like you’re referring to the new tax deduction system on online purchases—specifically, charges being applied at the time of digital transactions. Here’s an overview of what’s happening currently in Pakistan:

      📌 What Changed: Tax Deductions on Online Purchases

      • A new withholding tax called the Digital Transactions Proceeds Levy was introduced, applying to both local and foreign online purchases.
      • For foreign vendors (e.g., Temu, Shein, AliExpress), a fixed 5% tax is deducted at the source of payment, regardless of whether goods are digitally delivered or physically shipped.(Profit by Pakistan Today)
      • For domestic e‑commerce platforms, a tiered structure applies:
        • 1% tax on purchases up to PKR 10,000
        • 2% on amounts under PKR 25,000
        • Only 0.25% for purchases above PKR 25,000(Profit by Pakistan Today)
      • Courier services handling cash-on-delivery (CoD) orders are also required to collect specific taxes depending on the product category and remit/remit penalties if they fail to comply.(Profit by Pakistan Today)

      These measures aim to increase revenue and level the playing field for local businesses in the digital marketplace.(Profit by Pakistan Today)

      🔄 Recent Changes: Rollback of Digital Tax

      However, on July 1, 2025, Pakistan’s Federal Board of Revenue (FBR) retroactively nullified the digital tax on foreign online orders—effectively cancelling the previously implemented 5% levy.(Arab News) Around this date, the digital tax no longer applies to overseas-sourced purchases.(Arab News)

      ✅ Summary Table

      Vendor Type Tax Rate Applied Status After July 1, 2025
      Foreign e-commerce vendors 5% withholding No longer applies
      Local e-commerce platforms 1–2% tiered tax Still applies
      CoD courier services Product-dependent Still applies with compliance penalties

      🧭 What You Should Know

      • If you’ve made international online purchases before July 1, 2025, the foreign digital tax may have been applied—but now it’s officially rolled back.
      • Domestic purchases using local platforms are still subject to the tiered tax structure and CoD-related levies.
      • The focus of the rollback was on foreign digital services, not domestic e‑commerce.(Profit by Pakistan Today, Arab News, Reddit)

      If your question was about a similar tax deduction system in a different country (like Saudi Arabia or the UAE), or you meant VAT refunds or other online-related tax changes, feel free to clarify. I can help you dig into that specific system too!

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    3. Researcher

      اقدامات کا مقصد آن لائن تجارت کے بڑھتے ہوئے رجحان کے پیش نظر ٹیکس نیٹ کو وسعت دینا اور ڈیجیٹل معیشت میں شفافیت لانا ہے

      اقدامات کا مقصد آن لائن تجارت کے بڑھتے ہوئے رجحان کے پیش نظر ٹیکس نیٹ کو وسعت دینا اور ڈیجیٹل معیشت میں شفافیت لانا ہے

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