Business Desk 
Jul 19, 2025
Pakistan's tax authority has informed Google that it's not going to be impacted by a new 5% digital tax, which falls under the Digital Presence Proceeds Act 2025, which was developed for taxing global tech companies that offer digital services in Pakistan from outside the country.
The Federal Board of Revenue (FBR) made this announcement to Kyle Gardner, Google's head of public policy for South Asia. They explained since Google has a registered office in Pakistan, the new 5% tax does not apply to them.
This announcement is important for Pakistan's digital economy, with Google being the largest taxpayer of foreign tech companies in the country.
The Digital Presence Proceeds Act, which was passed in June 2025, mainly applies to tech giants such as Netflix, Meta, Amazon, and Microsoft, who earn money from Pakistani users with no local office and intend to impose taxes on the following services: cloud computing, streaming, e-learning, and online advertisements.
However, the FBR explained that tax residents with registered branches in Pakistan, which is now referred to as a registered office, should be taxed under the existing rules.
Until recently, Google was paying 10% tax under Section 152 of Pakistan's Income Tax Ordinance.
This was increased to 15%, but now Google may only need to pay 5%, depending on how its operations are managed globally.
The government also assured Google it won’t face double taxation. To attract more foreign firms, it offered a full income tax exemption until 2035 if Google moves its branch to a Special Technology Zone (STZ).
