For the nation’s technology and IT-enabled services (ITeS) industry, the Pakistan Software Houses Association (P@SHA) urges the government to establish a 10-year tax stability and compliance structure.
If Pakistan provides investors with what they value most—predictable taxes, easy remittances, and a single digital compliance experience—it may attract billions of dollars in tech investment.
Delivered to the Ministry of Finance prior to the Finance Bill, P@SHA’s Continuity & Consistency reform package outlines a few high-impact changes that would reduce compliance costs, bring tens of thousands of remote digital workers under the formal tax system, and encourage both foreign and domestic investment in Pakistani tech companies.
Chairman of P@SHA said in a statement:
“Every serious investor, local or international, asks the same two questions: What will my tax exposure be, and will the rules change after I invest?”
Currently, innovators spend too little time creating products that generate revenue for exports and too much time managing overlapping regimes. Capital will shift to Pakistan if we hard-code continuity and make compliance very effortless.
The government is being urged by P@SHA to take the following priority actions as soon as possible. Every item is made to be both financially responsible and implementable, while also sending a signal of stability to markets:
- Extension of the 10-Year Final Tax Regime (FTR) on export revenue from IT and ITeS
- Eliminate the tax rate disparities that penalize Pakistani IT companies for processing payrolls from Pakistan.
- For the IT sector, provide a Roshan-Digital-style route that allows for fast FCY receipt, clear conversion, optional retention, and direct data transfer to FBR.
- Since the industry is subject to FTR, rationalize the super tax (Section 4C)
- To acquire the trust of investors, exclude capital gains tax.
- Using a single return/creditable method, all provinces should harmonize their sales taxes on services (via the National Tax Council).
- Eliminate redundant labor-related taxes (EOBI—Section 46, SESSI, PWWF, and overlapping provincial labor laws) OR combine them into a single digital window specifically designed for knowledge workers.
The proposed changes—predictability, digitization, and administrative simplification—are not subsidies. After accounting for more documentation, expanded compliance, and greater documented export flows, the majority of actions can be either revenue-positive or budget-neutral.
In order to transform the package into draft language, digital filing procedures, and phased rollout milestones, P@SHA suggested holding collaborative working sessions with the Federal Board of tax, State Bank of Pakistan, National Tax Council, Ministry of IT & Telecom, and provincial tax authorities.
In order to incorporate policy signals into the Finance Bill and publish operational rules within a specified implementation window, the organization advises starting technical work right away.
Pakistan is at a turning point: if investors believe that the regulations will be upheld, the nation may compete for high-value digital work thanks to its youthful workforce, international clientele, and growing startup scene. Policymakers are urged by P@SHA to take advantage of this opportunity to communicate that message and tasks for 10-year tax stability.
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