ISLAMABAD: In a significant revision announced today under the Finance Act, 2025, the government has formally abolished the 5% Digital Presence Proceeds Tax previously applied to foreign vendors supplying digitally ordered goods or services to Pakistan.
The Federal Board of Revenue (FBR) issued SRO No. 1366(I)/ 2025, effective July 1, 2025, rescinding the levy that had been expected to yield approximately Rs 40 billion in revenue.
Earlier introduced under the Digital Presence Proceeds Tax Act, 2025, the 5% tax had targeted international tech firms like Google, Temu, and others that deliver digital products or services across borders, but will now be lifted for all such vendors, regardless of origin.
The cabinet approved the removal following concerns raised by the American Chamber of Commerce, as Pakistan seeks to strengthen trade relations and finalize a broader deal with the U.S.
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