Pakistan’s federal government has given good news to debit and credit card users. In the federal budget 2026-27, the withholding tax on overseas transactions made through Pakistani-issued cards has been reduced from 5% to just 0.5%. This big cut will make international payments much cheaper for ordinary people.
Finance Minister Muhammad Aurangzeb announced this change during his budget speech on June 12, 2026. The old 5% tax pushed many people to use informal ways to send money abroad, which hurt the economy. The new low rate of 0.5% will bring transactions back into the formal banking system.
This relief is especially helpful for travellers, online shoppers, freelancers, and students who pay for subscriptions, hotel bookings, shopping, or education fees abroad. It will lower the overall cost and encourage more people to use digital payments instead of cash or illegal channels.
The government also aims to boost financial inclusion and document the economy better. Some reports mention plans to abolish Capital Value Tax (CVT) on certain foreign assets, which adds to the relief for card users and investors.
Experts say this step will support the digital economy, help control foreign exchange outflows through proper channels, and make life easier for middle-class Pakistanis. If approved by the National Assembly, these changes will take effect soon.
This move is part of broader efforts to modernise Pakistan’s economy and make formal banking more attractive. Card users can now enjoy lower costs on global transactions.
