IT exporters, freelancers laud govt's decision to maintain Final Tax Regime at 0.25%

Stakeholders have welcomed the government’s decision to extend the Final Tax Regime (FTR) of 0.25% for the IT industry and freelancers for another three years until 2029 under the Finance Bill 2026–27.

Talking to Business Recorder, they said that the continuation of the tax regime will further strengthen the confidence of IT exporters and freelancers in the government’s taxation policies, and provide crucial support for sustaining export earnings growth in the years ahead.

Dr Noman Ahmad Said, an IT exporter and CEO of SI Global Solutions, said that the extension of the 0.25% Final Tax Regime for the IT industry is a positive step towards empowering IT companies and exporters that are making significant contributions to the country’s foreign exchange earnings through consistent growth and expansion.

“By incentivising the IT industry, the government will not only attract foreign exchange inflows but also generate higher tax revenues and create employment opportunities for youth,” he said.

He further emphasised that the government should maintain a stable and long-term tax policy for the IT sector to attract both local and foreign investment, accelerate IT exports, and encourage exporters to expand their operations into international markets.

Chairman of the Pakistan Freelancers Association (PAFLA), Ibrahim Amin, said that the proposal to maintain the 0.25% FTR for freelancers is a major relief and a strong source of motivation for both existing and aspiring freelancers.

He expressed confidence that freelancers’ earnings would continue to grow and could potentially double export receipts from $1 billion to $2 billion by 2029, with the number of freelancers will also be increasing to 4 million.

He also urged the government to reconsider its plan to tax content creators, particularly those producing informative and educational content, for at least the next three years.

“The government should first engage with social media and digital platforms to ensure fair revenue-sharing mechanisms for Pakistani content creators. Once a fair framework is established, taxation can be implemented through an equitable mechanism,” he said.

In addition to tax-related measures, the government has announced plans to expand the Prime Minister’s Youth Skill Development Programme, aiming to train 120,000 young people in IT and digital skills to enhance employability in the growing digital economy.

Saad Shah, CEO of Hexalyze and an IT exporter, said that the government’s investment in training and capacity building is an important initiative that will contribute significantly to the future growth of the IT industry.

He pointed out that the IT industry is facing a shortage of skilled human resources despite local universities are generating thousands of graduates every year.

“If Pakistan equips its youth with in-demand digital skills, the country will be able to meet both domestic workforce requirements and international demand for skilled professionals,” he said.

Stakeholders also urged the government to allocate Rs71.84 billion to the Ministry of Information Technology and Telecommunication (MoITT) for the development of IT infrastructure across the country, including IT parks, freelancing hubs, and export incentive programmes.

Local auto industry supports higher taxes

Meanwhile, the local auto industry supports higher taxes on imported SUVs because it helps level the playing field and may boost local car sales.

Federal excise duty (FED) has been imposed on imported SUVs with engines above 2000cc while tax on even larger SUVs (above 3000cc) has been increased.

Tax will also be imposed on imported luxury electric vehicles worth over Rs20 million.

Auto expert and analyst Abdul Rehman Aizaz said this will not impact and hit the local industry.

Suggesting to policy makers for forming the upcoming auto policy 2026-2031, he said and pleaded for fostering localisation of maximum and more auto parts, safeguarding the local parts manufacturing industries, reducing custom duty and abolishing regulatory duty and additional custom duty on all raw material including steel sheets, steel rods/shocks, aluminum ingot and others.