The Ministry has admitted that specific government incentives for freelancers are lacking and there is a need to consider incentives for them to create a favorable business environment. It is proposed that incentives available for the IT sector be applicable to the freelance sector as well.
Fiscal incentives have been recommended for freelancers in consultation with the working group of prominent freelancers and freelancing community representatives. The Ministry will recommend these proposals for inclusion in the relevant documents such as the Finance Bill and in the regulations of the State Bank of Pakistan (SBP) and the Securities & Exchange Commission of Pakistan, etc. after due process. The freelancers duly registered with PSEB will have an income tax holiday on export revenue till 2030, subject to receipt of income/revenue through formal banking channels in the specific purpose codes assigned by SBP.
Besides, PSEB will introduce an incentivized registration fee package for freelancers in addition to easier access to PSEB programs and initiatives, including fee and subsidized training, certifications, subsidized office space at Software Technology Parks (STPs) across the country, in addition to giving freelancers access to international marketing and matchmaking opportunities. As per the proposal, SECP will introduce a 20 percent registration fee discount for PSEB registered freelancers if they opt to register a single-member company.
It is proposed to make available collateral-free loans up to Rs. 1 million to the PSEB registered freelancers through commercial banks and financial institutions at subsidized rates.
It is proposed that the facility of subsidized health and life insurance be made available to PSEB registered freelancers under existing and future government and private initiatives. It is proposed that PSEB registered freelancers be included in any home loan schemes under the existing and government and private initiatives subject to providing a record of a minimum of 5 years of freelancing exports remittances of more than $10,000 per annum. Such home loan facilities shall be provided to these qualified freelancers at a subsidized loan rate.
It is proposed for the provinces and the federal capital revenue boards to implement a reduced sales tax rate, not exceeding 2 percent against the local services revenue earned by the PSEB registered freelancers. It is further proposed that this sales tax payment shall only be due at invoice month end plus 60 days.
Among the non-fiscal incentives, it is proposed that Visa facilitation shall be provided for PSEB registered freelancers whose export income/revenue for the last three years exceeds $5000 for each year and remitted through formal banking channels.
Fast track and simplified opening of foreign currency bank accounts for PSEB registered freelancers and retention of 365 percent foreign exchange in these bank accounts. It is proposed to establish technology business branches of commercial banks in at least six Pakistan cities where technology aware with SBP and commercial banks in providing relevant training for the staff of these branches.
It is proposed to establish facilitation desks at PSEB offices and PSEB operated Software Technology parks for freelancers to quickly resolve their issues pertaining to taxation, banking, intellectual property rights, Voice Over IP whitelisting, virtual Network Access (VPN), or any other legal or commercial matters.
It is also proposed Revenue Boards for PSEB to establish a free centralized VPN gateway service which Pakistan Telecommunication Authority will whitelist to provide services to verified freelancers registered with PSEB.
It is proposed that IP whitelisting is available for voice over IP (VOIP) traffic for PSEB registered freelance, where the VolP traffic must not exceed 200kbps. It is proposed to ensure the provision of Committed Information Rate (CIR) internet bandwidth service by the ISPs/telco operators packaged under work-from-home package with a minimum of 20 Mpbs connection at subsidized rates to be made available to PSEB registered freelancers.