Business Desk 
Jun 02, 2025
With the federal budget for fiscal year 2025-2026 around the corner, scheduled to be announced on June 10, the Pakistan Software Houses Association (P@SHA) has urged the government to introduce a tax-friendly package for the IT industry in the upcoming budget.
P@SHA Chairman Sajjad Mustafa Syed underscored that out of $700 million of total investment in Pakistan's IT sector, $600 million comes from member companies, noting that He emphasised that stability and incentives are essential to sustain the sector's growth.
The P@SHA chairman called for a tax-free budget allocation for the IT sector. He recalled his proposal to establish a 10-year fixed tax regime (FTR) from 2025 to 2035, which he wants to be formally announced in the 2025-26 budget, as reported by ProPakistani.
Companies registered with the Pakistan Software Export Board (PSEB) should continue to pay only 0.25% withholding tax beyond 2026 under the fixed tax system proposal, he requested.
The P@SHA higher-up also raised concerns regarding tax inequality, as remote IT workers are taxed at a maximum of 1%, while salaried IT employees face income tax rates of up to 35%. He urged the government to equalise tax treatment for employees and freelancers.
Facilitating the movement of foreign currency revenues was also emphasised by Syed, warning that Pakistan may struggle to attract foreign direct investment in the IT sector without long-term policies.
