IT secretary says there is nothing to worry about as FBR targets freelancers exempt from taxes

The federal secretary for Information Technology and telecom, Shoaib Siddiqui gave a statement similar to Prime Minister Imran Khan’s famous catchphrase, “You don’t have to worry,” as he assured the IT industry that the government wouldn’t be eliminating the tax exemptions available to them till 2025. However, the ground reality appears to be quite the opposite since the FBR has started identifying individuals and companies availing the tax exemptions/concessions granted under the Income Tax Ordinance 2001, according to reports.

The FBR earlier this month announced to initiate a crackdown against Pakistani freelancers in conjunction with the payment gateway – Payoneer after it emerged that the company paid an amount of Rs. 60 billion to 70,000 Pakistani citizens without paying taxes. The move, which came as a part of the government’s decision to withdraw tax exemptions for IT-enabled services, drew strong criticism from individuals associated with online freelance/consultancy services and the IT industry, along with other influencers.

The secretary’s remarks were part of an interview he gave to Urdu News when asked about the proposed tax amendment laws during a visit to Quetta and other federal secretaries. “It is my appeal to the IT industry to keep calm as there is no need to worry. The IT industry and its growth is dear to the government. Continue your business with ease, and keep contributing revenue to the country. The rebates and reliefs granted to the IT sector will remain and will be continued even after 2025.”, he said.

Prime Minister Imran Khan earlier this month approved the introduction of the Money Bill in the National Assembly to withdraw around 80 income tax exemptions and reform the tax laws under dictation from the IMF, which has asked Pakistan to withdraw income tax exemptions worth Rs140 billion.

The federal secretary also stated that the software exports have been positive when exports from all other sectors turned negative due to the COVID-19 pandemic and have increased 40% compared to the last year.

Read More: IT industry expresses strong concern over the newly proposed tax rules