The Pakistan IT Industry Association (P@SHA), in its comprehensive Federal Budget 2026–27 recommendations, aimed at solidifying the nation’s digital exports ecosystem, has stressed the need to ensure policy stability for formal IT enterprises – and, providing necessary clarity for the broader digital workforce. P@SHA aims to clarify its official stance, which prioritizes the sustainable, long-term growth of registered IT companies while supporting the gradual formalization of the gig economy, while categorically stating that P@SHA fully supports maintaining a supportive environment for the genuine freelancers of the country.

P@SHA aims to clarify its official stance, which prioritizes the sustainable, long-term growth of registered IT companies while supporting the gradual formalization of the gig economy, while categorically stating that P@SHA fully supports maintaining a supportive environment for the genuine freelancers of the country.

To provide stability and confidence to the industry, P@SHA has strongly recommended the continuation of the existing 0.25% final tax regime for IT exporters and genuine freelancers for a period of 10 years.

This policy continuity is deemed essential to attract global business, secure foreign exchange inflows, and empower the registered corporate entities that serve as the primary engines of Pakistan’s technological and economic advancement.

A central pillar of P@SHA’s budgetary framework is the critical need to distinguish between genuine, project-based freelancers and full-time remote employees working for overseas entities.

Tufail Ahmed Khan, Honorary President of the Global Freelancers Union (GFU), acknowledged that P@SHA has rightfully proposed that authentic freelancers should continue to benefit from the simplified 0.25% final tax regime (FTR); whereas, it recommends that remote professionals earning fixed salaries from foreign employers be taxed appropriately under standard graduated salary slabs.

This strategic distinction is designed to foster a level playing field for domestic IT companies. Currently, local enterprises that invest heavily in physical infrastructure, compliance, comprehensive employee benefits, and skill development face unfair competition for talent from unregistered remote setups.

P@SHA Chairman Sajjad Syed emphasized that, by formalizing the tax structure for full-time remote workers, P@SHA aims to protect the local corporate sector, encourage the documentation of the economy, and incentivize the transition of individual contributors into fully structured, globally competitive IT businesses.

Furthermore, the recommendations emphasize the urgent need for structural reforms that benefit the entire ecosystem but are particularly vital for scaling IT enterprises.

P@SHA is advocating for simplified banking processes, smoother inward remittance mechanisms, and frictionless tax filing procedures to remove barriers to business growth. Acknowledging that freelancers play a vital role in youth employment and foundational digital exports, P@SHA believes the ultimate goal must be enabling these individuals to scale into formal organizations.

📢 For the latest Tech & Telecom news, videos and analysis join ProPakistani's WhatsApp Group now!

Follow ProPakistani on Google News & scroll through your favourite content faster!

They make billions but hate paying more than 1 percent tax ? 😆