Senate Body Seeks Report on Firms Allegedly Misusing IT Tax Exemptions

ISLAMABAD: The Senate Standing Committee on Information Technology revisited concerns over alleged tax fraud within the IT sector, with former IT Minister Anusha Rahman reiterating her previous claims that several companies operating in the goods sector were disguising themselves as IT firms to unlawfully benefit from tax exemptions.

Rahman disclosed that a prior investigation by the Federal Board of Revenue (FBR) had identified 3,200 such companies, out of which only eight were registered with the Pakistan Software Houses Association (P@SHA). The issue, initially highlighted by TechJuice in an exclusive report, was brought back into focus as the committee sought a detailed review of the matter.

The Senator alleged that this misuse had resulted in an estimated loss of $300 million in just the first two months of 2025, posing a significant threat to the country’s economy. She criticized P@SHA for not addressing the issue with the government, fearing that authorities might revoke the entire tax exemption policy for IT companies. She urged the Ministry of IT to verify these claims and take action if necessary.

In response, Federal Minister for IT and Telecommunications Shaza Fatima rejected the assumption that all 3,200 firms were fraudulently claiming tax benefits, stating that not all IT companies are required to register with P@SHA. She asserted that the FBR’s automated system and recent reforms, implemented on the Prime Minister’s directives, had improved oversight and reduced loopholes.

Fatima also highlighted the positive growth of the IT sector, reporting a 27% increase in IT industry expansion and a 25% rise in internet usage over the past year. She dismissed concerns that internet services faced disruptions, asserting that fixed-line internet remained stable. Additionally, she reaffirmed the government’s commitment to preventing the harassment of IT companies by regulatory authorities, as per the Prime Minister’s directives to the FBR and the State Bank of Pakistan.

Following the discussion, the Senate IT Committee directed the relevant authorities to submit a comprehensive report on the companies allegedly involved in tax fraud in the next meeting, signaling a potential crackdown on tax evasion within the sector.