PASHA has formally urged the Federal Board of Revenue and the Ministry of Finance to extend the 0.25 percent Final Tax Regime on IT export receipts under Section 154A for a period of ten years, through Tax Year 2036. The association made the request ahead of the federal budget 2026-27, arguing that the continuation of the existing tax framework is critical for sustaining the export growth trajectory and supporting the long-term development of Pakistan’s digital economy. The full details of PASHA’s budget recommendations are available at https://champ.ly/xoQI0cja.
PASHA Chairman Sajjad Syed stressed that the current Final Tax Regime is scheduled to expire in June 2026, a timing that creates structural uncertainty that severely undermines investment planning, foreign exchange generation, and the ability of Pakistani technology firms to honour international client commitments. The expiry of the regime without a clear successor or extension would introduce a degree of policy instability at precisely the moment when Pakistan’s information technology export sector is recording its strongest growth figures in years, making continuity of the tax framework a matter of urgency for both the government and the industry.
The IT and IT-enabled services sector has demonstrated highly resilient growth under the current predictable tax framework, with IT services exports reaching a record $3.8 billion in Financial Year 2024-25, reflecting an 18 percent increase over the previous year. PASHA cited these figures to reinforce its case that the existing regime is not merely a tax relief measure but an active enabler of the sector’s export performance, and that any disruption to the framework risks reversing the momentum that has been built over several years of consistent policy support. The association further noted that Pakistan’s share of global IT services trade remains critically low despite these domestic gains, particularly when measured against regional competitors such as India, whose technology sector generated $224 billion in exports with a workforce of over 5.4 million in Financial Year 2024-25, underscoring how much headroom Pakistan still has to grow if policy conditions remain supportive.
The formal appeal to extend the Final Tax Regime by ten years reflects PASHA’s broader position that short-term or annually reviewed tax policies are fundamentally incompatible with the long investment cycles, multi-year client contracts, and talent development timelines that define the information technology export industry. A decade-long extension would provide the predictability that technology firms need to make capital investments, expand their teams, pursue international certifications, and compete credibly for large enterprise contracts in markets where policy stability is viewed as a proxy for a country’s overall readiness as a technology services destination.
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