The Pakistan Software Houses Association (P\@SHA) has called on the federal government to introduce a comprehensive, tax-friendly package for the IT industry in the upcoming federal budget, scheduled for June 10. The association emphasized that favorable and consistent policies are critical to sustaining growth, protecting jobs, and attracting foreign investment in Pakistan’s fast-growing technology sector.
Read More: Nayatel Brings High-Speed Internet and Smart Digital Services to Lahore
Speaking to the media, P\@SHA Chairman Sajjad Mustafa Syed highlighted that of the total \$700 million invested in the country’s IT sector, \$600 million originates from P\@SHA member companies, underscoring the association’s significant role in driving digital innovation. He stressed that continued momentum in the sector depends on the introduction of supportive, long-term policies.
Chairman P\@SHA urged the government to announce a tax-free budget for the IT industry, with no new taxes, and called for the implementation of a 10-year fixed tax regime from 2025 to 2035, to be formally introduced in Budget 2025-26. He also demanded that companies registered with the Pakistan Software Export Board (PSEB) should continue to be subject to only 0.25 percent withholding tax beyond 2026 under the fixed tax system.
Raising concerns about taxation disparities, Syed pointed out that remote IT workers are taxed at a maximum rate of 1 percent, while salaried IT employees are taxed up to 35 percent. He urged the government to equalize tax treatment between freelancers and employees to create a level playing field and foster growth across all segments of the industry.
He further stressed the need for smoother movement of foreign currency revenues, noting that the absence of stable, long-term policy frameworks will hinder Pakistan’s ability to attract foreign direct investment in the tech sector. Without bold, business-friendly measures, the country could face the loss of up to 600,000 IT jobs, he warned.
As Pakistan prepares its federal budget, P\@SHA’s proposals aim to position the IT industry as a cornerstone of economic growth, digital transformation, and global competitiveness.
