Pakistan’s IT industry calls for tax relief, policy stability in the federal budget

The Pakistan Software Houses Association (P@SHA) has called for a comprehensive package for the IT industry in the upcoming federal budget, urging tax relief and long-term policy stability to attract investment.

Chairman Sajjad Mustafa Syed emphasized the industry's contributions, stating that of the total $700 million invested in Pakistan’s information technology sector, $600 million comes from P@SHA member companies.“We demand a tax-free budget with no new taxes imposed,” Syed said in a statement Sunday, adding that a 10-year fixed tax regime (FTR) should be introduced to ensure stability for businesses.

Syed urged the government to clearly announce the 2025-2035 fixed tax framework in the upcoming budget, maintaining a 0.25% withholding tax for IT companies registered with the Pakistan Software Export Board (PSEB beyond 2026).

Calling for parity in taxation, Syed noted that remote workers currently face a maximum 1% income tax, while IT company employees can be taxed up to 35%. He stressed the need for a uniform tax rate across the sector to foster growth.

Pakistan’s IT industry continues to attract foreign direct investment, but Syed warned that unclear policies and regulatory hurdles could deter investors.

He urged the government to facilitate the movement of foreign currency revenue and to curb what he described as harassment of IT companies.“If business-friendly policies are not implemented, the jobs of over 600,000 IT professionals could be at stake,” Syed cautioned. “With the right support, we can win the economic war just as we would any other.”

The federal budget is set to be announced on June 10.