Pakistan moves to grant tax exemptions to US tech giants as trade deal with Trump administration nears: report

The Federal Board of Revenue (FBR) has moved a summary to grant tax exemptions to US tech giants under the Digital Presence Proceed Act 2025. This move is aimed at securing an expected trade deal with the Trump administration, with both countries working towards a tariff agreement before the August 1, 2025, deadline, The News reported, citing official sources. 

The summary has been submitted for approval by Prime Minister Shehbaz Sharif and the federal cabinet, but no decision has been made yet. The cabinet meeting, originally scheduled for earlier, has now been rescheduled for Thursday.

The trade deal with the US would see reciprocal tariff incentives aimed at boosting bilateral trade and investment. Previously, the USA imposed a 29% tariff on Pakistan, but it is now expected to reduce it to between 15 and 20%.

Finance Minister Muhammad Aurangzeb and other key stakeholders have been in the US with hopes of finalising the trade deal within the next 48 to 72 hours. 

The report also cited a government official, saying that Pakistan aims to gain a competitive advantage over countries like Bangladesh, India, and Vietnam through this agreement. The trade deal could potentially boost Pakistan’s exports by several billion dollars in the coming years.

The official also added that while a Free Trade Agreement (FTA) is not feasible due to stringent conditions, Pakistan is exploring options for a Preferential Trade Agreement or Bilateral Trade Treaty. Islamabad is also prepared to provide assurances that tariff incentives will remain in place after the completion of the IMF program.