Pakistan eCommerce Association Demands Equal Tax Policy
The Pakistan eCommerce Association (PEA) has raised concerns over what it calls a widening tax disparity between local and foreign online marketplaces, urging the government to ensure a level playing field for the country’s e-commerce sector.
According to PEA Chairman Omer Mubeen, the government’s decision to maintain heavy taxes on domestic e-commerce companies while withdrawing the 5 percent flat rate tax on international platforms like Temu, AliExpress, and SHEIN has created an uneven business environment.
“The excessive tax burden is not only stifling the growth of local businesses but is also forcing hundreds of small and medium enterprises (SMEs) and women entrepreneurs to shut down,” Mubeen stated. He explained that the recently implemented 18 percent GST, coupled with cash-on-delivery and digital payment taxes ranging from 0.25 percent to 2 percent, is squeezing the already tight profit margins of indigenous platforms.
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The 2025-26 federal budget, in the field of taxation, caused severe disappointment to the industry stakeholders. Pakistan eCommerce Association leaders argue that while domestic platforms continue to pay substantial income and sales taxes, international giants are now enjoying a competitive advantage—one that could lead to increased foreign exchange outflows from Pakistan.
Shoaib Bhatti, President of the PEA Karachi Chapter, stressed that such policies could undermine the country’s digital economy and job creation efforts. “Removing taxes for foreign players while burdening local companies will discourage online entrepreneurship at a time when Pakistan should be promoting it,” he warned.
The association highlights that Pakistan’s e-commerce industry, valued at around $7 billion in FY24, has been expanding at an annual growth rate of 20–25 percent. The sector comprises more than 12,000 major players and over 200,000 SMEs, collectively providing direct and indirect employment to more than 500,000 people. About 70 percent of such an ecosystem encloses SME-led, which depends vastly on low-cost logistics and digitalized technologies.
The Pakistan eCommerce Association has called on policymakers to reconsider current tax measures and adopt reforms that support both cash-on-delivery and digital transactions. Industry experts believe that fostering a fair tax environment will not only strengthen domestic companies but also protect Pakistan’s foreign exchange reserves and help sustain its economic growth momentum.
