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Newly released figures by the Federal Board of Revenue (FBR) presented to the National Assembly Standing Committee have revealed that Pakistanis spent over Rs. 317 billion on online apps and digital services from major global and local platforms in the fiscal year 2024–25.
This explosive rise in digital transactions has prompted the federal government to introduce a new taxation policy through the “Digital Presence Proceeds Levy Act, 2025.” The act imposes a 5% tax on the total amount paid for both goods and services supplied by foreign and local digital vendors.
Meta, Apple, Google Lead the Digital Economy Surge
Leading the chart in terms of revenue is Meta (Facebook), which recorded transactions worth Rs. 12.3 billion, reflecting the growing appetite for advertising and content-driven services.
Apple/iTunes topped the transaction count, with over 5.1 million transactions totaling nearly Rs. 6 billion, indicating strong usage of iPhones, app purchases, music, and cloud services in Pakistan.
Google followed with 2.3 million transactions amounting to Rs. 5.94 billion, as its ecosystem of apps, ads, and YouTube monetization remains deeply embedded in Pakistani digital life.
E-Commerce and Streaming Also Show Strong Performance
AliExpress, the Chinese online shopping giant, registered spending of nearly Rs. 5 billion across 944,466 transactions. Despite a relatively lower transaction volume, the high value indicates significant consumer interest in imported goods.
New entrant Temu, although newer to the Pakistani market, recorded a notable Rs. 1.8 billion in spending with far fewer transactions, suggesting high-ticket orders or bundled shopping trends.
On the entertainment front, Netflix remained a dominant force, clocking 3.37 million transactions worth Rs. 2.79 billion, proving that digital entertainment demand remains high despite inflation and rising subscription rates.
“Other” Platforms Account for the Bulk of Spending
Perhaps the most surprising figure came from platforms classified as “Other” by the FBR—unspecified digital vendors or potentially bundled services. These accounted for a staggering 28.6 million transactions, totaling Rs. 281.4 billion, which makes up the overwhelming majority of the digital expenditure.
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Analysts suggest this may include in-app purchases, bundled mobile services, gaming subscriptions, and smaller or unregistered digital vendors that are harder to categorize individually.
New Tax Policy: Digital Presence Proceeds Levy Act, 2025
To bring this vast, fast-growing digital economy under the tax net, the government has implemented the Digital Presence Proceeds Levy Act, 2025, aimed at ensuring foreign and domestic digital platforms contribute to national revenues.
The act imposes a flat 5% tax on the total proceeds generated by:
- Foreign vendors like Amazon, Facebook, Google, Temu, Netflix, Apple
- Local platforms such as Daraz, Pak Wheels, and others supplying digitally ordered goods or services
This levy will apply whether the vendor has a physical presence in Pakistan or not, effectively targeting the revenue streams generated from Pakistani consumers.
Implications for the Digital Economy and Consumers
While the new tax may boost government revenue, it could also lead to increased service costs for consumers if platforms pass on the tax burden. Experts argue that the tax will help formalize the digital economy, but warn that transparency and regulation will be key to its success.
Local businesses that operate digitally may now need to register, report earnings, and comply with new tax filing requirements, potentially increasing operational complexity but also encouraging competition and growth.
Pakistan’s Shift Toward Digital Taxation
The move reflects a global trend, where countries are introducing digital services taxes (DSTs) to ensure multinational tech companies pay a fair share in local markets. For Pakistan, this tax could pave the way for stronger digital governance and more localized revenue generation.
However, its effectiveness will largely depend on enforcement capacity, compliance by foreign companies, and public communication about how the tax will be implemented and used.
