P@SHA Calls for Stable Tax Policy and Clear Framework for IT Sector in Budget 2026–27

The Pakistan IT Industry Association has called for a stable and long-term policy framework in its recommendations for the Federal Budget 2026–27.

The association stressed that policy continuity is essential for strengthening Pakistan’s digital exports ecosystem.

It also emphasized support for both registered IT companies and genuine freelancers.

Call for long-term tax stability

P@SHA recommended continuing the 0.25% final tax regime for IT exporters and genuine freelancers for the next 10 years.

According to the association, this stability will help attract global clients and increase foreign exchange inflows.

In addition, it will strengthen registered IT firms that drive Pakistan’s digital economy.

Clear distinction between freelancers and remote employees

The association highlighted the need to separate genuine freelancers from full-time remote employees working for foreign companies.

It stated that real freelancers should continue under the simplified tax regime.

However, it suggested that salaried remote workers should be taxed under regular income tax slabs.

As a result, policymakers could create a more balanced and transparent tax structure.

Concerns over unfair competition

P@SHA said local IT companies face unfair competition from unregistered remote setups.

These companies invest in infrastructure, compliance and employee benefits.

Therefore, the association argued that a clear tax distinction would create a fair playing field.

Focus on formalization of digital workforce

P@SHA Chairman Sajjad Syed said the goal is to strengthen formal IT businesses.

He added that structured companies can better compete in global markets.

Moreover, formalization will help improve documentation of the digital economy.

Support for freelancers and gig economy

Honorary President of the Global Freelancers Union Tufail Ahmed Khan supported the proposal to maintain simplified taxation for genuine freelancers.

At the same time, he agreed that full-time remote workers should be taxed differently.

This approach, he said, would protect both freelancers and the corporate IT sector.

Reforms for ease of doing business

P@SHA also called for simplified banking procedures and improved remittance systems.

Additionally, it urged easier tax filing processes for IT businesses and freelancers.

These reforms aim to reduce operational barriers and encourage growth.

Push for advanced technology investment

Furthermore, the association stressed investment in Artificial Intelligence, cloud computing and cybersecurity.

It said such investments are critical for scaling Pakistan’s IT exports.

Ultimately, P@SHA aims to position Pakistan as a global hub for high-value technology outsourcing.