ISLAMABAD: Federal Finance Minister Muhammad Aurangzeb has announced significant relief for customers using banking cards internationally. The withholding tax on the overseas use of debit and credit cards has been reduced from 5% to 0.5%.
The Federal Minister stated that the withholding tax on transactions made abroad or on international online platforms with the debit and credit cards issued by Pakistani banks has been cut from 5% to just 0.5%.
As a result, the tax burden for individuals using their cards for hotel stays, shopping, and other expenses while traveling abroad will now be minimal.
Additionally, individuals or companies paying for subscriptions to international software, tools, or cloud services will benefit from the reduced tax rates.
International payments will now be much more affordable for ordinary consumers shopping on global e-commerce websites.
Economists have welcomed this government’s decision, noting that this significant reduction in tax rates will boost the documented economy. People will likely prefer to make payments through legal banking channels and cards instead of using informal methods such as hawala or hundi.
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