Pakistan’s 2025-2026 Budget Introduces New E-commerce Tax, Adjusts Income and Withholding Tax Rates

Pakistan’s Ministry of Finance released the Federal Budget Documents for 2025-2026 on 10 June 2025
Introduction of a 5 percent tax on foreign e-commerce providers through the Digital Presence Proceeds Tax Act, 2025
5 percent tax to be withheld by banks and other payment service providers
E-commerce platforms required to collect and remit 18 percent sales tax
Reduction in income tax brackets for salaried individuals to 1 percent, 11 percent, and 23 percent
Reduction in surcharge on individual taxable income over PKR 10 million from 10 percent to 9 percent
Increase in tax rate on interest income from 15 percent to 20 percent
Reduction in withholding tax rates for the construction sector for filers, non-filers, and certain other categories
Additional details on budget measures to be published once available

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.