The government has proposed extending the preferential tax regime for Pakistan’s IT and IT-enabled services (ITeS) sector until June 30, 2029, providing a major boost to one of the country’s fastest-growing export industries.
According to budget proposals, the existing 0.25 percent tax rate on IT exports under the Final Tax Regime (FTR), which was due to expire on June 30, 2026, will now be extended for another three years.
The proposal follows concerns raised by IT companies, freelancers, software houses, and digital exporters regarding the future tax treatment of the sector. Prime Minister Shehbaz Sharif reportedly took notice of these concerns and directed authorities to ensure continuity of incentives aimed at supporting export growth.
Officials say the extension is intended to provide policy certainty to businesses operating in the technology sector and strengthen Pakistan’s position as a competitive destination for digital services exports.
Pakistan’s IT and ITeS industry has emerged as one of the country’s most dynamic sectors in recent years, driven by a growing pool of freelancers, software developers, technology startups, and export-oriented firms. The sector has consistently recorded growth in export earnings and has been identified by policymakers as a key source of foreign exchange.
The continuation of the reduced tax rate is expected to encourage further investment in the technology sector, attract foreign clients, and help local firms expand operations in international markets.
The government believes the move will also support job creation, particularly for young professionals entering the digital economy. Industry stakeholders have long argued that stable tax policies are essential for sustaining growth and competing with regional technology hubs.
