ISLAMABAD: Federal Finance Minister Ishaq Dar presented the budget for the fiscal year 2023-24 in the National Assembly on Friday, following approval from the cabinet. The budget brings forth several advantageous provisions for the information technology (IT) sector and freelancers in Pakistan.
According to the budget document, the preferential income tax rate of 0.25 percent for increasing IT exports will be extended until June 30, 2026, encouraging continued growth in the sector.
To facilitate freelancers in Pakistan, the budget exempts sales tax registration and reporting for exports up to $24,000 per year. Furthermore, a simplified income tax return will be introduced specifically designed for freelancers, streamlining their taxation process.
Moreover, the budget introduces an exemption on the import of software and hardware. IT service providers will be permitted to import software and hardware duty-free up to one percent of their export value. The budget document specifies that the limit for subsidized imports will be $50,000 per year.
Recognizing the significance of the IT sector, the Finance Minister announced the inclusion of the Information Technology sector in the Small and Medium Enterprise (SME) category. This categorization will provide IT with the benefit of income tax rates. Additionally, automated exemption certificates for IT services and exporters will be implemented to simplify the process.
The federal budget also outlines plans to provide technical training to 50,000 information technology graduates in the upcoming financial year, enhancing their skill sets and employability.
Furthermore, the current sales tax rate on IT services in Islamabad will be reduced from 15% to 5%, easing the tax burden on businesses operating in the capital city.
In a bid to facilitate access to financial resources, the budget incorporates the information technology sector in loan schemes provided by banks. To incentivize banks to extend loans to the IT sector, a concessional tax facility of 20 percent has been introduced.
Overall, Pakistan’s budget for the fiscal year 2023-24 aims to bolster the IT sector and empower freelancers through various tax incentives, facilitative policies, and increased access to training and financing opportunities.
(Islamabad51-Newsdesk)
