To stimulate investment in the IT sector, the federal government has agreed to lower tax rates on IT investments, provide tax incentives to freelancers, and standardize duty-free equipment.
Finance Minister Ishaq Dar Friday advocated that the 0.25 percent discounted income tax rate stay in place for the next three years in order to stimulate IT exports in the nation in today’s budget 2023-24 presentation.
Dar praised the country’s considerable ability in information technology and pushed for banks to be supplied with a reduced tax rate of 20% to aid lending on investments in the IT industry, noting that the present typical tax rate on banks for investment is 39%.
The finance minister also stated that the government has suggested that duty-free equipment be offered in the field to boost investment in the IT industry. He advocated for the industry to be designated as a small and medium-sized enterprise (SME) so that people might benefit from unique and exclusive income tax rates.
Dar recommended issuing Automated Exemption Certificates to non-residents within 30 days, as well as lowering the GST rate from 15% to 5% for IT and ITeS services in Islamabad (ICT).
The minister proposed eliminating the obligation for people to file a sales tax return in order to benefit from the 0.25 percent concessional rate. “Pakistan’s youth work as freelancers from home, bringing vital foreign exchange into the country,” the minister continued.
Dar proposed that such individuals be exempt from sales tax registration and file a simplified single-page income tax return if their previous fiscal year IT and IT-enabled services exports were less than $24,000.
