Debit and credit card users get big relief

ISLAMABAD: The Finance Minister of Pakistan, Muhammad Aurangzeb, has announced a significant reduction in the withholding tax levied on overseas transactions made through debit and credit cards during his budget 2026-27 speech.

Under the revised policy, the withholding tax on transactions made abroad or through international online platforms using Pakistani bank-issued debit and credit cards has been reduced from 5 percent to 0.5 percent.

The finance minister has said that the move would substantially lower the tax burden on travelers using their cards for hotel bookings, shopping, and other expenses while abroad.

While the companies and individuals that pay for international software, tools, and cloud-based services subscriptions through card transactions would also get rid of hefty taxes.

In addition, consumers purchasing goods from global e-commerce platforms are likely to see lower costs on international payments.