The government was urged to incorporate an extensive, tax-free incentives for the IT sector in the federal budget of June 10, by the Pakistan Software Houses Association (P@SHA)
Reporters were told by P@SHA Chairman Sajjad Mustafa Syed, that out of $700 million investment in businesses, $600 million are invested by the P@SHA member in Pakistan’s IT sector. He highlighted that for sustained growth, protection, incentives, and stability are essential.
Chairman P@SHA insisted on an IT industry budget devoid of new taxes. He demanded that a 10-year fixed tax regime (FTR) be formally declared in Budget 2025–2026 and put into effect between 2025 and 2035.
Furthermore, he insisted that businesses that are under the fixed tax system and businesses that are registered with the Pakistan Software Export Board (PSEB) continue to pay only 0.25 percent withholding tax after 2026.
Syed expressed concern about tax disparity, pointing out that whereas salaried IT workers pay income tax rates of up to 35%, remote workers only pay a maximum of 1%. He called on the government to treat freelancers and employees in the industry equally with regard to taxes.
He underlined the necessity of facilitating the flow of foreign exchange earnings and cautioned that Pakistan will find it difficult to draw in foreign direct investment in IT in the absence of stable, long-term policy.
Chairman of P@SHA warned that 600,000 IT workers’ jobs may be in jeopardy if tax free incentives are not implemented.
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