In a bid to bolster the Information Technology (IT) sector and facilitate business growth, the Finance Minister Ishaq Dar unveiled significant tax relief measures in the federal budget for the fiscal year 2023-24.
Under the new provisions, Information Technology and IT-enabled service providers will be able to import software and hardware equal to one percent of their exports without incurring any taxes. The import limit for these items has been set at $50,000 annually. Additionally, the government will automate the exemption certificate process for IT exporters, streamlining their operations and reducing bureaucratic hurdles.
Addressing the National Assembly, the Finance Minister expressed optimism about the IT sector’s potential to become an engine of economic growth in the coming years. He highlighted the existing 0.25 percent income tax concession for promoting IT exports, which will be extended until June 2026, providing stability and support to the industry.
Recognizing the challenges faced by freelancers, the government has exempted them from sales tax registration and returns for annual exports worth up to $24,000. Furthermore, a simplified one-page income tax returns form will be introduced to ease the filing process for freelancers.
While the budget lacked significant announcements for the tech and telecom sectors, there was welcome news for gadget lovers and freelancers alike.
The budget document revealed that laptops, personal computers, notebooks, computer parts, and related devices would be exempt from sales tax. Additionally, certain parts of lithium batteries used in various electronic devices, including smartphones, laptops, and appliances, will also be exempt from sales tax.
To further support software exporters registered with the Pakistan Software Export Board, a concession on the assessed value of imported goods equivalent to 1% of their export proceeds from the previous financial year will be granted. This concession, subject to specific conditions, aims to reduce costs and enhance competitiveness for software exporters.
The tax relief measures outlined in the budget reflect the government’s commitment to fostering the growth of the IT sector and creating a favorable business environment for freelancers and tech enthusiasts. These steps are expected to drive innovation, encourage investment, and pave the way for a thriving digital economy in Pakistan.