Pakistan Introduces New Tax Measures on Foreign Credit and Debit Cards to Boost Revenue
In a move to strengthen its revenue collection, Pakistan has implemented significant changes to the taxation of foreign credit and debit card transactions. The Federal Board of Revenue (FBR) recently issued a notification announcing a substantial 400% increase in taxes on such transactions.
Under the new measures, taxpayers using credit and debit cards will experience a noteworthy hike in taxes. The tax rate has been raised from 1% to 5% for these individuals. Moreover, registered taxpayers who fail to fulfill their tax obligations will face an even higher tax rate, as it has been raised from 2% to 10% on credit and debit card transactions.
Explaining the rationale behind these measures, the FBR highlighted the issue of non-resident Pakistanis transferring large sums of money abroad, which has adversely impacted the country’s revenue inflow. To curb the outflow of foreign capital, the FBR took the initiative to increase the tax rates on credit and debit card transactions significantly.
These new tax measures are expected to not only boost the government’s revenue but also encourage greater compliance among taxpayers. By discouraging excessive foreign fund transfers, Pakistan aims to foster economic stability and growth within the country.
It is important for taxpayers, especially those utilizing foreign credit and debit cards, to be aware of these recent changes to ensure compliance with the revised tax rates. These measures mark a decisive step by the government towards achieving fiscal sustainability and effective revenue management.
