The IT industry wants policy continuity.
In keeping with the goals of the forward-thinking “Uraan Pakistan” economic plan, important players in the IT sector have urged the government to carry out more reforms and provide incentives for the substantial expansion of the IT sector and related industries in order to boost export revenues and generate employment for young people.
They demanded that their suggestions be included in the next federal budget for 2025–2026 in order to allow the IT industry to expand more quickly, create more jobs, and more successfully support the growth of the national economy.
In order to support sectoral growth and development, they also emphasized the necessity of maintaining current policies and resolving regulatory and tax-related issues in the 2025–2026 finance bill, especially for the IT sector and independent contractors.
The Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) IT Committee Convener, Khushnood Aftab, suggested that the government lower import taxes on necessary hardware parts such motherboards, RAM, SSDs, batteries, and screens. This would encourage local value addition and draw investment to domestic production facilities by supporting the local assembly of fully assembled imported gadgets such as laptops, desktops, and tablets.
He pointed out that Pakistan might save foreign cash, generate skilled jobs, and establish itself as a competitive exporter in regional markets by providing more assistance for the localization of computer systems and hardware accessories.
He went on to say that the locally branded IT hardware market merits special attention because it is in line with the “Made in Pakistan” campaign and the larger goal of Digital Pakistan.
Additionally, he emphasized how vital it is that local brands be fairly included in government procurement in order to assist domestic business, promote scale, and improve quality without sacrificing standards.
The introduction of targeted R&D tax credits and innovation grants to support companies working on emerging technologies within the country is one way that Pakistan can prepare for the growing demand for AI-integrated hardware and edge computing devices, according to Khushnood Aftab, Chairman of Viper Group.
According to Muhammad Umair Nizam, Senior Vice Chairman of the Pakistan Software Houses Association (P@SHA), the IT industry plays a significant role in attracting international investment, job creation, and economic expansion. He emphasized that prolonging the Final Tax Regime (FTR) for an additional ten years will offer the policy stability required to promote reinvestment and assist Pakistan in preserving its competitive advantage in international markets.
In order to maintain uniformity, remove jurisdictional ambiguities, and lessen compliance requirements, he also recommended the government to harmonize the definitions of IT and Information Technology Enabled Services (ITeS) across federal and provincial tax legislation. He said that a unified framework will boost sectoral growth, simplify taxation, and boost investor confidence by establishing a predictable regulatory environment, ultimately bolstering Pakistan’s competitiveness and digital economy.
Reducing income tax for salaried IT workers is also vital, he said, since it will assist retain top talent and lessen the current brain drain.
Ibrahim Amin, the chairman of the Pakistan Freelancers Association, issued a warning against raising the tax rates for independent contractors, who already pay taxes on each transaction in addition to costs levied by payment gateway service providers and freelance platforms.
With the Ministry of Finance and Revenue’s approval, he suggested that the government exclude IT firms and independent contractors from withholding tax (WHT) on foreign transactions under the Exporters’ Special Foreign Currency Account (ESFCA) in the next finance bill.
In order for IT enterprises and freelancers to take advantage of simplified banking services and better access to capital, he also encouraged the finance division to make sure that all of the benefits of the Roshan Digital Account (RDA) are extended to ESFCAs.
