Islamabad (Web Desk): The Government of Pakistan has officially abolished the 5% digital tax on goods and services purchased online from foreign platforms, as part of the Finance Act 2025 recently approved by Parliament.
The Federal Board of Revenue (FBR) issued a formal notification confirming that the tax exemption will come into effect from July 1, 2025.
This move, sanctioned by the federal cabinet, marks a strategic shift in the country’s approach to digital taxation and aims to create a more favorable environment for international technology companies and digital commerce.
The tax removal directly benefits global tech firms such as Google and the Chinese e-commerce platform Temu, which previously faced a 5% tax on their digital revenues generated from users in Pakistan.
The decision is expected to encourage these companies to continue offering their services in the country without passing additional costs onto consumers. It also signals Pakistan’s willingness to support digital innovation and cross-border online trade.
As per the reports, by reversing the tax, the government aims to promote smoother operations for global digital platforms and reduce the cost burden on Pakistani consumers who rely on foreign services for various needs, from cloud storage and software to online shopping and digital advertising.
The tax exemption is also expected to benefit Pakistan’s growing freelance and e-commerce sectors by improving access to affordable international services and reducing regulatory hurdles.