ISLAMABAD: Federal Finance Minister Ishaq Dar has announced tax incentives for IT freelancers in the upcoming fiscal year 2023-24 budget.
The Finance Minister stated that IT and IT-enabled services are the fastest-growing sectors contributing significantly to the economy. Despite facing challenges due to global economic issues, he said, adding that the government was confident that this sector will prove to be the engine of growth in the coming years.
He mentioned that Pakistan ranks second in the world in terms of freelancers who conduct their business. To address their ongoing issues and generally resolve problems in this sector, the following measures are being taken:
To increase IT revenues, a reduced tax rate of 0.25% is being applied to income tax, and this facility will continue until June 30, 2026. Freelancers faced difficulties in filing monthly sales taxes, return so to facilitate them in the business environment, freelancers exporting up to $24,000 annually are exempted from sales tax registration and filing returns.
The Finance Minister further stated that a simplified income tax return is being implemented for them. IT service providers will be allowed tax free import of hardware and software equivalent to 1% of their export after exports of $50,000 annually.
Ishaq Dar said that automated automation certificates will be issued for IT services and exporters, and the IT sector is being granted Special Economic Zone status to avail income tax rates.
He mentioned that the current sales tax rate on IT services in Islamabad is being reduced from 15% to 5%.