The Federal Board of Revenue (FBR) has officially suspended the 5% Digital Presence Proceeds Tax starting from July 1, 2025, in a strategic move to help finalize a significant trade agreement with the United States. This major decision aims to boost Pakistan’s exports and improve its global trade position, especially against regional competitors like India, Bangladesh, and Vietnam. ProPakistani
According to a notification released by the FBR, the Digital Presence Proceeds Tax will no longer apply to goods and services ordered digitally from outside Pakistan. The government clarified that the tax will not be charged on any such international transactions, which were previously subject to the said Act.
This suspension comes at a crucial time as Finance Minister Muhammad Aurangzeb and top-level government officials are currently in Washington D.C., actively working to close a comprehensive trade deal with the U.S. The expected agreement could unlock billions of dollars in export potential for Pakistan and strengthen its trade footprint in the global digital economy.
Experts view this move as a positive signal to international digital platforms like Temu, SHEIN, and AliExpress, which were previously affected by the tax. Removing this burden may encourage more foreign e-commerce companies to do business in Pakistan and provide better access to affordable products for local consumers.
The suspension is also seen as part of a broader plan to align Pakistan’s tax policies with global trade standards, making the country a more attractive destination for foreign investors and digital service providers.
While the original tax aimed to create revenue from digital imports, critics argued that it hurt consumer access and international e-commerce growth. The new decision reflects a shift in priorities, placing greater importance on foreign trade relationships and long-term economic gains.
If the U.S.–Pakistan trade deal is finalized successfully, it could result in new market access for Pakistani goods, potential tariff relaxations, and increased foreign direct investment (FDI). This policy shift is expected to be welcomed by exporters, tech companies, and the business community, who have been pushing for reforms in the digital economy.
The FBR’s notification confirms that this tax relief is now in effect and applies to all applicable digital transactions from July 1, 2025 onward. Observers believe this could mark a new era for Pakistan’s digital trade environment, with better integration into the global e-commerce landscape. Wikipedia
 suspends Digital Presence Proceeds Tax from July 1, 2025, in hopes of finalizing a major trade deal with the United States.){kind=link}