If you are in Pakistan and use a credit card to pay for international software, tools, or services, you will be charged more than just a normal conversion fee. There are several additional taxes that you will need to pay for your transaction.
For instance, if you make an international transaction of $100, you will first be charged based on that day’s exchange rate between USD and PKR. Then, you’ll have to pay a 4% transaction fee on the total amount, along with a 17% Federal Excise Duty (FED) on the transaction fee. But that’s not all! You will also be charged a 5% withholding tax (WHT) at the end of the transaction.
Here’s how it works if you spend 100 dollars:
- First, they change your dollars to rupees using the day’s exchange rate. For example, if 1 dollar equals 278.40 rupees on April 5, 2024, then 100 dollars becomes 27,840 rupees.
- Next, there’s a 4% charge on the amount, which adds 1,113.6 rupees.
- Then, there’s a 17% tax on the 4% charge, adding 189.312 rupees.
- Finally, there’s a 5% tax on the total amount, which is 1,392 rupees.
So, for a 100 dollar purchase, the total cost in Pakistani rupees would be 30,534.9.
In short, if you spend 100 dollars with your credit card and the dollar to rupee rate is 278.40, you’ll end up paying a total of 30,534 rupees.
