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Karachi, August 8, 2025: The Pakistan eCommerce Association (PEA) has called on the government to reduce taxes on local e-commerce companies and digital payments, warning that the current tax regime is stifling growth and hurting SMEs.
PEA Chairman Omer Mubeen said higher taxes are impacting the entire e-commerce ecosystem from logistics to allied industries and forcing many small businesses and women entrepreneurs to shut down. He stressed that domestic players, already paying substantial taxes, face reduced competitiveness compared to foreign platforms.
In the 2025–26 budget, the government imposed new levies on local platforms, including 18% GST and 0.25%–2% taxes on cash-on-delivery and digital payments. By contrast, a 5% flat tax on international platforms such as Temu, AliExpress, and SHEIN was later withdrawn, leaving local firms at a disadvantage.
PEA Karachi Chapter President Shoaib Bhatti urged the government to adopt a flat 0.25% rate for both COD and digital payments, noting that foreign platforms drain foreign exchange while domestic firms create jobs and economic activity.
Industry data shows over 12,000 major e-commerce players and 200,000 SMEs operate in Pakistan, supporting half a million jobs. The sector, valued at around USD 7 billion, has been growing 20–25% annually, with 70% of activity driven by SMEs relying on affordable digital tools.
Bhatti warned that without tax relief, regressive policies could push many out of business, undermining Pakistan’s digital economy and youth employment prospects
