Ministry of Information Technology and Telecom has outlined a series of recommendations designed to boost Pakistan’s IT export potential and create a supportive environment for startups, SMEs, and freelancers. In a statement to the National Assembly, the ministry stressed categorizing the ICT sector as SMEs and suggested enhanced tax incentives, establishment of facilitation desks in financial institutions, and simplified business registration and tax processes to foster sector growth.
Key proposals included tax exemptions on imports of IT hardware and software pivotal for exports and a “Made in Pakistan” policy to encourage local technology manufacturing. To strengthen support, the ministry urged the State Bank of Pakistan (SBP) to set up facilitation desks at branches managing Export Special Foreign Currency Accounts (ESFCA), expedite corporate ESFCA debit card issuance, and create a foreign exchange portal for smoother remittance handling.
Further tax reforms were advised, including eliminating the 5% advance tax on debit card-linked ESFCA accounts and standardizing the definition of IT services at federal and provincial levels. The ministry recommended extending the 100% tax credit for Pakistan Software Export Board (PSEB)-registered startups to 2030 and called for tax exemptions on dividends, capital gains, and sales tax for IT services. Clarification on the final tax regime for remittance platforms such as Payoneer and Wise was also highlighted.
Freelancers, seen as vital in reducing unemployment and increasing foreign remittances, would benefit from targeted relief, including reduced income tax rates and exemption from monthly sales tax returns and registration. This would position Pakistan as an attractive base for freelance professionals.
The ministry also pushed for a government-supported venture capital fund to assist SMEs, startups, and freelancers, proposing tax incentives for banks and VC firms to stimulate IT sector investments.
Emphasizing a balanced approach, the ministry outlined plans to prevent talent migration from established firms to freelance roles by simplifying tax regulations and creating user-friendly digital platforms for compliance. These measures aim to foster a supportive ecosystem for Pakistan’s IT sector, driving exports and enhancing the nation’s technological stature on the global stage.
