Pakistan Proposes Tax Exemption for US Tech Firms

As part of a strategic move to finalize a trade agreement with the United States, Pakistan’s Federal Board of Revenue (FBR) has submitted a proposal to grant tax exemptions to major US tech companies like Google. This exemption would remove the existing five percent levy under the Digital Presence Proceed Act 2025, pending approval from Prime Minister Shehbaz Sharif and the federal cabinet.

The proposed tax relief comes at a critical time, as Islamabad and Washington enter the final phase of negotiations, expected to conclude before August 1, 2025. The US had earlier imposed a 29 percent tariff on Pakistani exports but is now open to reducing it to between 15 and 20 percent. This development is seen as a major opportunity for Pakistan.

Finance Minister Muhammad Aurangzeb is currently in the United States to lead the talks, accompanied by other senior officials. While a full Free Trade Agreement remains unlikely due to tough US conditions, officials are considering a Preferential Trade Agreement or Bilateral Trade Treaty.

Experts believe this deal could give Pakistan an edge over regional competitors like India, Bangladesh, and Vietnam, and help increase exports by billions of dollars in the coming years.

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