Pakistan Software Houses Association (P@SHA) has submitted budgetary proposals to the government, urging tax relief for the IT industry.
P@SHA Chairman Muhammad Zohaib Khan expressed concern about the different tax rates applied to IT professionals working remotely compared to those employed in Pakistan. He proposed a reduced payroll tax rate of 5% for employees of companies registered with P@SHA and the Pakistan Software Export Board (PSEB).
The association also called for complete income tax exemption for IT exporters registered with both P@SHA and PSEB. They propose an amendment to the Income Tax Ordinance to eliminate the need for additional exemption certificates from the Federal Board of Revenue (FBR).
P@SHA further requested clarification regarding super tax on IT & IT-enabled services exporters. They argue that since these companies were eligible for a 100% tax credit under a previous provision, super tax shouldn’t apply. They propose adding an explanation to the relevant tax code to prevent future disputes.
Highlighting the industry’s contributions, Khan emphasized the IT sector’s significant role in Pakistan’s economy.
“The IT industry has achieved remarkable milestones,” Khan stated. “It is the largest contributor to service exports, surpassing $2.6 billion in 2023. This sector boasts a unique 77% trade surplus, supports over 800,000 professionals, and is the fastest-growing sector in Pakistan.”
P@SHA’s proposals aim to incentivize further growth in the IT industry, potentially aiding in reducing the current account deficit and shaping a brighter economic future for Pakistan.
