Islamabad 10 June, 2022: PMLN led coalition Government has withdrawn tax exemptions available to technology exporters upto June 2025 who were bringing 80 percent of their IT exports back to Pakistan. Technology sector showed exponential growth and brought large amount of foreign currency to support country FX reserves and also supported the Pakistan stock exchange through significant rally in stock prices.
Now good days are over for Pakistan Technology companies as they will pay 0.25 percent as final income tax on their exports which were completely exempt before upto June 2025. Avanceon, Netsol and Systems limited are the major IT exporters listed on Pakistan stock exchange which are driving their income through large amount of exports.
The IT and ITeS sector is seen as the backbone for the growth of the country. The IT industry has been showing an impressive growth pattern and its exports are expected to exceed $3 billion by the end of this financial year. The change in policy is being cited as a damaging factor for investor confidence.
Tax exemption on Income from exports of computer software or IT services or IT enabled services were available till 30th June, 2025. Earlier former Prime Minister Imran Khan in his address to the nation has announced a complete tax exemption for information technology (IT) companies and freelancers, reverting the earlier status of the IT industry as tax-exempt.
In his address, Prime Minister Imran Khan said that a 100 per cent capital gains tax exemption will be given for investments in IT startups, besides easing foreign exchange restrictions for the industry.
The sector is already suffering from double taxation as its services were charged taxes at a business level as well as at an individual level when the profits were distributed to shareholders. The proposed reforms also aim to resolve this issue by onboarding all stakeholders.
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