ISLAMABAD — July 20, 2025: The Pakistan Software Houses Association (P@SHA) has called on the government to establish a long-term, predictable tax and compliance regime for the technology and IT-enabled services (ITeS) industry.
Ahead of the Finance Bill, P@SHA submitted its “Continuity & Consistency” reform package to the Ministry of Finance, outlining measures aimed at reducing compliance costs, formalizing tens of thousands of remote digital workers in the tax system, and attracting both domestic and foreign investment into Pakistan’s tech firms.
“Every serious investor, local or international, asks two key questions: what will my tax exposure be, and will the rules change after I invest?” said P@SHA’s chairman. “Currently, innovators spend excessive time managing overlapping regulations instead of focusing on building export products. By ensuring continuity and simplifying compliance, Pakistan can attract significant capital.”
The association proposed several priority reforms for early implementation, including:
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Extension of the 10-year final tax regime for IT and ITeS export income
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Removal of tax discrepancies penalizing Pakistani IT companies operating payrolls domestically
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Creation of a Roshan Digital Account-style facility to expedite foreign currency receipts for the IT sector
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Transparent currency conversion processes and optional foreign currency retention
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Direct data integration with the Federal Board of Revenue (FBR) to ease compliance
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Rationalization of super tax and exemption from capital gains tax to boost investor confidence
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Harmonization of provincial sales tax on services
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Elimination or consolidation of overlapping labor-related levies through a unified digital platform tailored for knowledge workers
P@SHA emphasized that these reforms are not subsidies but necessary steps to promote digitalization and simplify administrative processes in the tech sector.
