Pakistan Repeals 5% Digital Tax on Foreign Tech Firms: What It Means for Compliance

Pakistan initially imposed a 5% digital tax on foreign digital suppliers, effective from July 1, 2025.
The tax targeted streaming services, cloud providers, and non-resident businesses selling digital goods or services to Pakistan.
Due to international pressure, Pakistan decided to roll back the tax, effective from July 1, 2025.
The rollback exempts foreign digital suppliers from the 5% digital tax, reducing compliance burdens.
VAT compliance remains mandatory for all digital suppliers in Pakistan.
The legal framework for the digital tax still exists, allowing for potential future reinstatement.
Businesses should stay informed and prepared for any changes in tax requirements.

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.