Tech Desk 
Jun 11, 2025
An undated image. — Freepik/P@SHA/Canva
The Pakistan Software Houses Association (P@SHA) has warned that Budget 2025-26 could deal a serious blow to the country’s IT and IT-enabled Services (ITeS) sector, calling it a “death knell” for one of Pakistan’s few successful export industries.
P@SHA represents over 600,000 professionals in the country’s formal IT sector. It argues the budget does not provide for many longstanding requests that are essential to grow the industry and attract and utilise foreign investment, and compete globally.
The association has asked the government to chart a 10-year tax policy that allows companies the assurance and the room to prepare, even if it will take five to 10 years to scale.
The proposed budget will continue to apply heavy taxes on local IT firms, while remote workers earning disconnected revenues from foreign sources will continue to be untaxed as long as they are getting paid through informal channels.
This disproportion applies to the remote workers in terms of taxes incurred, but especially the export dollars earned, which lead to increased costs to local employers while pushing the talent abroad.
P@SHA had recommended a simple definition of a remote worker as an individual who earns more than Rs2.5 million per year from less than three foreign sources.
This would capture the remote worker, but impact only the top 5% of remote earners while leaving freelancers and any incidental remittances untouched.
What’s more concerning, according to P@SHA, is the government’s failure to extend the current tax relief for formal exporters. This is a would-be delay, likely costing over 700 million dollars in the risk of loss in all investment commitments under the Digital FDI program.
