ISLAMABAD: The Federal Board of Revenue (FBR) has officially suspended the Digital Presence Proceeds Tax effective July 1, 2025, as part of Pakistan’s efforts to finalize a significant trade agreement with the United States.
The decision, announced through an FBR notification on Wednesday, aims to remove the 5% tax previously imposed on goods and services supplied digitally from foreign sellers. The move is seen as a strategic concession to promote smoother trade relations and boost Pakistan’s export potential.
Finance Minister Muhammad Aurangzeb, along with senior government officials, is currently in Washington, D.C., negotiating the final terms of the trade pact. According to sources, the agreement could enhance Pakistan’s export volume by several billion dollars, offering a competitive edge over regional players such as India, Bangladesh, and Vietnam.
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The FBR notification clarified that the suspended tax will no longer apply to any digitally ordered goods or services supplied from outside Pakistan that were previously chargeable under the Digital Presence Proceeds Act.
“This notification shall come into force from July 1, 2025,” the document stated, confirming that the tax will be discontinued for the foreseeable future.
This policy reversal has been widely welcomed by e-commerce users and digital trade stakeholders, who had raised concerns over the impact of such taxes on international purchases and small businesses.
In the wake of the announcement, trade through platforms like Temu, SHEIN, and AliExpress is expected to resume with greater ease, benefiting both Pakistani consumers and foreign online retailers.
Meanwhile, travelers and importers have expressed optimism over the broader implications of the trade negotiations, which could open new avenues for economic cooperation and digital commerce.