ISLAMABAD – The Pakistan Software Houses Association (P@SHA) has urged the government to create a stable and long-term tax system for the technology and IT-enabled services (ITeS) sector. In a recent statement, P@SHA Chairman Sajjad Mustafa Syed said the current system is complex, forcing innovators to focus more on compliance than developing export-ready products.
He explained that investors often hesitate due to uncertainty around tax rules. If Pakistan ensures consistent tax regulations and smoother compliance, capital inflows into the country’s tech sector could increase significantly. The association has submitted a detailed reform package to the Ministry of Finance before the latest Finance Bill was finalized.
P@SHA’s proposal, called “Continuity & Consistency,” outlines key reforms to reduce compliance burdens and attract investment. It recommends extending the 10-year final tax regime for export income, fixing payroll tax issues, and introducing a system like the Roshan Digital Account to allow faster foreign currency payments for tech exporters.
Moreover, the association suggested optional retention of foreign funds, automatic data sharing with the Federal Board of Revenue (FBR), and transparent currency conversion. It also called for the rationalisation of the super tax and proposed exemptions on capital gains tax to build investor confidence.
Additionally, P@SHA stressed the need to harmonise provincial sales taxes and eliminate overlapping labour levies like EOBI, SESSI, and the Punjab Workers Welfare Fund. The association recommended these be merged into a single digital platform for knowledge workers to simplify compliance for startups and freelancers.
P@SHA clarified that these measures are not subsidies but crucial steps to encourage digitalisation, cut red tape, and build a more competitive IT ecosystem. The tech industry believes these actions are essential for Pakistan to fully unlock its digital export potential.