Regulatory: Pakistan tightens taxation on foreign platforms

On July 1, the Pakistani government imposed new taxes on foreign platforms operating online without a physical presence in the country. This reform, part of the Digital Presence Proceeds Tax Act of the 2025 Finance Act published on June 27, provides for a 5% tax on sales, in addition to the local V.A.T. of 18%. Pakistan intends to rebalance competition with local merchants, who are subject to V.A.T. and a corporate tax of up to 35%.

To remember: In Pakistan, since the tax came into force,...