As yet another step towards generating opportunities for Pakistan’stech-savvy youth, the government will likely promulgate an ordinance togrant incentives, including tax exemptions, to facilitate the InformationTechnology (IT) sector, freelancers, and startups.
Highly-placed officials at the Federal Board of Revenue (FBR) toldProPakistani that a Presidential Ordinance to facilitate the IT sector wasbeing drafted. They said the tax exemption benefit was the biggest demandof the sector.
However, the revision in the income tax slabs for the salaried class wouldnot be part of the said ordinance. This ordinance would only give taxbenefits and no new taxation, officially clarified.
It is to note that Prime Minister Imran Khan had announced a complete taxexemption for IT companies and freelancers, reverting the earlier status ofthe IT industry as tax-exempt. The package included 100 percent capitalgains tax exemption will be given for investments in IT startups, besideseasing foreign exchange restrictions for the industry.
The FBR has drafted the Income Tax Ordinance which would be promulgated inthe next few days, the officials added.
Prime Minister has directed to allow IT/ITES companies and freelancers toretain 100 percent amount of remittances received through proper bankingchannels, in FCY Accounts without any compulsion to convert them intoPakistani Rupees.
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Furthermore, there will be no restriction of outward remittances from FCYaccounts for PSEB-registered IT companies and freelancers.PM Imran bets on IT sector to generate employment, dollar inflow
The prime minister has also directed the SBP to introduce financing streamsfor the IT/ITES sector and freelancers keeping in view operationalarchitecture and industry needs for these sectors.
The Ministry of Information Technology & Telecommunication had prepared apackage of fiscal and non-fiscal incentives for freelancers including theproposal of a reduced sales tax rate, not exceeding two percent, as well asincome tax holiday on exports income/ revenue/ receipts till 2030 andfast-track and simplified opening of foreign currency bank accounts tocreate a favorable business environment.
