3 min read
As Pakistan’s digital economy gains momentum. The country’s top tech association is urging bold action to unlock billions in export potential. The Pakistan Software Houses Association (P@SHA) has laid out a reform roadmap focused on one clear message: give investors what they value most—predictable taxes, seamless compliance, and remittance-friendly regulations. According to P@SHA, these reforms could supercharge foreign investment and bring thousands of freelancers into the formal economy.
The Pakistan Software Houses Association (P@SHA) calls upon the Government of Pakistan to lock in a long-term, predictable tax and compliance framework for the country’s technology and IT-enabled services (ITeS) sector. P@SHA’s Continuity & Consistency reform package, delivered to the Ministry of Finance ahead of the Finance Bill, lays out a small number of high-impact changes that would slash compliance costs, bring tens of thousands of remote digital workers into the formal tax net, and catalyze both domestic and foreign investment into Pakistani tech firms.
“Every serious investor, local or international, asks the same two questions: What will my tax exposure be, and will the rules change after I invest?” said a P@SHA Chairman. “Right now, innovators spend too much time navigating overlapping regimes and too little time building export-earning products. If we hard-code continuity and make compliance near effortless, capital will move to Pakistan.”
P@SHA’s Priority Reform Actions:
-
Continue the 10-Year Final Tax Regime (FTR) on IT/ITeS export income.
-
Eliminate tax rate discrepancies that penalize firms paying salaries from Pakistan.
-
Establish a Roshan-Digital-style channel for IT exports with quick foreign currency receipt, transparent conversion, and optional retention.
-
Rationalize the super tax (Section 4C) since IT/ITeS already fall under FTR.
-
Exempt capital gains tax to boost investor confidence in tech startups.
-
Harmonize provincial sales tax on services through a unified, creditable system via the National Tax Council.
-
Remove duplicative labor levies (EOBI, SESSI, PWWF) or consolidate them via a single digital compliance window tailored for knowledge workers.
These proposed changes are not financial subsidies; they’re aimed at enhancing predictability, promoting digitalization, and simplifying administration. P@SHA emphasizes that many of these steps are budget-neutral or even revenue-positive. Especially when increased documentation, broader tax compliance, and higher export flows are considered.
To operationalize these reforms, P@SHA has suggested joint working sessions with the Federal Board of Revenue, the Ministry of IT & Telecom, the State Bank of Pakistan, the National Tax Council, and provincial revenue authorities. The goal is to align on draft policy language, build out digital workflows, and define a phased rollout plan.
Pakistan stands at a digital crossroads. With a young workforce, strong global tech links, and a vibrant startup ecosystem, the country is well-positioned to attract high-value international work if investors are confident that the rules won’t shift overnight. P@SHA is urging policymakers to act now and lock in a future of stability, growth, and global competitiveness for Pakistan’s tech sector.
