Govt Slaps 5% Tax on Global Apps, Citing $1 Billion Surge in Online Consumer Spending
With online spending by Pakistani consumers crossing Rs317 billion in fiscal year 2024–25, the federal government has introduced a new tax measure aimed at tapping into the rapidly growing digital economy. Under the newly approved Digital Presence Proceeds Levy Act, 2025, a 5% tax will now be levied on revenues generated by foreign digital platforms operating in Pakistan.
This tax will apply to major global tech and e-commerce companies including Facebook, Google, YouTube, Netflix, Amazon, Alibaba, Apple, and Temu, as well as local platforms such as Daraz and PakWheels that provide digitally ordered goods and services to Pakistani consumers.
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The move comes as part of the federal budget’s broader strategy to enhance tax collection from the digital sector, which has seen unprecedented growth in recent years. According to official figures, Pakistani users spent:
- Rs123 billion on Facebook, primarily for advertising and marketing services
- Rs5.94 billion on Google services
- Rs5.14 billion on Apple’s iTunes and App Store purchases
- Rs4.9 billion on AliExpress and Rs2 billion on Alibaba
- Rs2.79 billion on Netflix subscriptions
- Rs1.82 billion on emerging e-commerce platform Temu
- Over Rs1 billion on Shopify-based online businesses
Cumulatively, spending on various other international platforms surpassed Rs281 billion, highlighting a widespread shift among Pakistani consumers toward global digital consumption—from streaming and shopping to app usage and cloud services.
The National Assembly’s Standing Committee on Finance has formally endorsed the Digital Proceeds Act, which aims to bring more transparency and accountability to digital commerce. Officials say the measure will help capture revenue from companies with a significant user base and economic presence in Pakistan, even if they operate without physical offices in the country.
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