Pakistan’s information technology sector could face a 300 percent higher tax burden in the upcoming budget, top sources informed ProPakistani.
Sources said the federal government is considering increasing the tax rate on IT companies from 0.25 percent to 1 percent.
The proposed increase comes at a time when the country’s technology sector is recording strong growth in exports and freelance earnings.
According to the Pakistan Economic Survey 2025-26, ICT export remittances rose nearly 20 percent to $3.388 billion during July-March FY2025-26, compared to $2.829 billion in the corresponding period last year.
The freelance economy also continued its rapid expansion. Freelancer remittances surged 51 percent year-on-year to $856.3 million, highlighting the growing contribution of Pakistan’s digital workforce to foreign exchange earnings.
The potential tax increase has emerged just days after the Pakistan Freelancers Association (PAFLA) urged the government to maintain supportive tax policies for freelancers and the entire digital economy in the Federal Budget 2026-27.
In its budget proposals, PAFLA called on the Federal Board of Revenue (FBR) and the Ministry of Finance to retain the existing 0.25 percent tax rate on foreign exchange earnings for at least the next decade.
The association also recommended establishing freelancing hubs across major cities, providing subsidies for internationally recognized certifications, and launching initiatives to strengthen workforce skills.
Maintaining a competitive tax regime is critical for sustaining export growth, attracting investment, and expanding Pakistan’s presence in global digital markets.
The government has yet to make a final decision on the proposed increase, which is expected to be clarified in today’s budget presentation.
This is the only reason to increase tax that why this only sector is earning too much. So ab is ko bhi tabah krdo….