Extension of Income Tax Holiday - In order to attract long term investment in the IT/ITeS
sector, income tax holiday under clause 133 of the Second Schedule of the Income Tax
Ordinance, 2001 to be extended till 2025 to IT / ITeS Companies registered with the
Pakistan Software Export Board on their export revenue/income;
5% Cash Reward on Export Remittances - Improving the export remittances and the
reporting of remittances in the purpose codes assigned by the State Bank of Pakistan for
the IT & ITeS sector is key to boosting the economic growth of the country. Hence, 5% cash
reward shall be awarded on the net export remittances of PSEB registered IT/ITeS
companies and PSEB registered call centers subject to a verifiable criteria to be agreed
among the State Bank, FBR, Ministry of IT & Telecom, and Pakistan Software Houses
Association (PASHA);
5% Sales Tax on Services (Domestic) – Profit margins in the domestic market are already
low, and customers are unwilling to pay double digit sales tax which results in IT companies
shouldering the cost. Hence, reduced sales tax of about 5% shall be charged on domestic
revenues of IT/ITeS companies located in Islamabad Capital Territory. Additionally, MoIT
will take up the matter of rationalizing sales tax in provinces through appropriate channels;
Provision of Bank loans to IT/ITeS Industry: - Finance Division in consultation with Ministry
of IT & Telecom will work with relevant stakeholders including State Bank on a proposal to
reduce long term financing rates to 5% for IT/ITeS companies as well as financing
arrangements based on trade receivables/contracts and intellectual property such as
trademarks, copyrights and patents. This will enable IT enterprises to compete for large
projects locally and internationally;
Tech SEZs (Special Economic Zones) – Ministry of IT & Telecom will recommend to
incentivize investment in IT infrastructure in the country to Board of Investment (BOI)
through the concept of technology SEZs, availing the already in place Special Economic
Zone Act 2012 of Pakistan through modifications and exceptions, extending the incentives
of SEZs to IT industry;
Proliferation of new IT Parks – Given the high land cost in major metropolitans such as
Islamabad and Karachi, PSEB would allocate land on a long term lease to IT/ITeS
companies. Detailed terms and conditions for the leased land will be decided as part of the
Action Plan and would include specific commitments for development, occupation and
employment generation as specified by the PSEB;
Non-Fiscal Incentives
Reinforce the industry status of IT Sector at all levels of the government in pursuance to
previous formal notification of the government.
Digital Pakistan Policy
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