The Ministry of IT and Telecom has proposed measures to boost Pakistan’s IT exports and create a supportive business environment for startups, SMEs, and freelancers.
In a written proposal to the National Assembly, the Ministry highlighted the importance of categorizing the ICT sector as SMEs and called for streamlined tax incentives, dedicated facilitation desks in financial institutions, and simplified business registration and tax filing processes. This strategy, according to the Ministry, could greatly enhance efficiency and accelerate growth in Pakistan’s tech industry.
The proposals also include tax exemptions on importing IT hardware and software essential for exports, along with a “Made in Pakistan” policy to encourage locally produced tech products.
The Ministry of IT proposed that the SBP set up facilitation desks for ICT startups and SMEs at branches handling Export Special Foreign Currency Accounts (ESFCA) and expedite corporate ESFCA debit cards, allowing 100% retention. They also advised creating a foreign exchange portal for smoother remittances.
Tax reforms suggested include removing the 5% advance tax on ESFCA debit cards, aligning the IT services definition across levels, and extending the 100% tax credit for PSEB-registered startups to 2030.
The Ministry recommended tax exemptions on dividends and capital gains for IT startups, exempting IT services from sales tax, and clarifying the tax regime for remittance users like Payoneer and Wise.
For freelancers, the Ministry proposed reducing the final tax to 0.25% for PSEB-registered individuals and exempting them from monthly sales tax returns and registration. These measures aim to improve Pakistan’s business environment for freelancers and encourage more high-paying international opportunities.