90%
Overseas card transaction tax reduced from 5% to 0.5%
Direct cost relief on every payment for cloud, tools, and SaaS made through Pakistani bank-issued cards.
The advocacy record
Wins the Sector Earned
Formal asks and outcomes, fiscal relief, connectivity, banking and trade — each tied to the instruments and papers behind it.
Formal asks — recommendation vs outcome
3 years
Extension of the 0.25% Final Tax Regime Partially delivered
Recommended: extend the FTR under Section 154A for a minimum of 5 years, preferably 10. Delivered: extended through Tax Year 2029, three years of policy certainty. The push to convert this into a permanent statutory benefit continues into the 2029 review cycle.
Rs. 5.29B
National skills programs budget allocation Delivered
Recommended: a dedicated PKR 5 billion federal allocation for national digital skills programs. Delivered: Rs. 5.29B for digital skills targeting 120,000 youth, within over Rs. 10B committed across skills, education, and AI. P@SHA is now pursuing the joint industry governance and outcomes-based funding design it proposed.
Carried
Tax classification: independent exporters vs remote employees Not addressed
Recommended: a Category A / Category B distinction under Section 154A with graduated rates, closing a 22 to 44 percent take-home pay arbitrage draining senior talent from organized IT firms. The Bill extended the rate uniformly. This remains P@SHA's top ask for the next cycle.
Carried
Capital gains & repatriation relaxation for venture capital Not addressed
Recommended: pass-through treatment for licensed VC/PE funds, capital gains exemption for 3+ year holds in PSEB-registered companies, and repatriation guarantees. Not included in the Bill; the most consequential omission given VC investment fell from $366M in 2021 to $22.5M in 2024.
Carried
Made in Pakistan: public sector IT procurement mandates Not addressed
Recommended: minimum allocation thresholds for locally developed software and hardware in federal and provincial procurement, with phased implementation. Not taken up in this Bill; advocacy continues with MoITT and PSEB.
Carried
Harmonization of provincial sales tax on domestic IT services Not addressed
Recommended: a unified 5% rate, single registration, and single-portal filing through the CCI or National Tax Council. A federal-provincial matter beyond the Finance Bill alone; P@SHA continues to pursue the coordination mechanism.
Fiscal & structural relief
100%
Startup withholding exemption under Clause 43F
Ends the refund-cycle working capital squeeze for qualifying early-stage companies.
Rs. 511K
Salaried IT tax relief across all brackets
Surcharge abolished and thresholds restructured, improving talent retention at zero cost to employers.
Rs. 500M
Super tax threshold raised from Rs. 150M, rate cut to 8%
A company earning Rs. 200M that previously paid Rs. 5M in super tax now pays nothing, freeing capital for reinvestment.
CVT
Capital Value Tax on foreign assets removed
Eliminates a friction point affecting founders' and professionals' decisions about where to domicile assets.
10%
New tax credit for FBR system integration
Covers hardware, software, and installation costs, incentivizing the digital compliance infrastructure the sector needs.
Preserved
Sector's preferential tax treatments protected
WHT on IT services held at the preferential 4% rate, and the Section 65F technology tax credit continued into the new fiscal year. Defending existing benefits through each budget cycle is as much a part of advocacy as winning new ones.
Connectivity
350+
IP addresses whitelisted for member companies
Restored reliable connectivity for hundreds of exporting firms during a period of network disruption.
20
VPN whitelisting secured, with member cases resolved
Whitelisting of 20 VPNs alongside case-by-case resolution and facilitation for member companies, a member webinar on the whitelisting process, and the Chairman's testimony before the Senate.
Public
Industry statement on the internet firewall
P@SHA put the industry's position on record on connectivity disruptions and their export impact.
Banking & SBP
Revised
Equity Investment Abroad policy revised
Expanded room for Pakistani IT companies to invest in and operate international subsidiaries.
$25K+
Form R requirements simplified
SBP's 2026 instructions raised the Form R threshold above USD 25,000 and removed the per-transaction requirement, following sustained industry feedback on documentation burden. Bank-level implementation is being tracked in Live Issues.
Concluded
Additions to the approved overseas and digital vendors list
Industry-proposed vendors added, easing routine payments for international services.
Delivered
Prioritized list of digital banking facilities
A consolidated industry requirement set for digital and online banking facilitation, now with the regulator.
Trade & exports
ICT items
Tariff concessions on ICT items
Secured through P@SHA's tariff proposals to the Ministry of Commerce.
EDF
EDF proposal completed with the Ministry of Commerce
P@SHA's Export Development Fund proposal, developed and delivered through direct engagement with the Ministry.
Rs. 10B+
Skills, education, and AI allocations in Budget 2026-27
Including Rs. 5.29B for digital skills targeting 120,000 youth and the AI Seekho 2026 programme, a meaningful increase in public investment in the sector's talent pipeline.
"On behalf of PaysysLabs Private Limited, we would like to appreciate P@SHA for its timely and valuable support in facilitating our recent EOBI-related issue. Their guidance, coordination, and prompt response helped us move the matter forward efficiently."
"We sincerely appreciate P@SHA's prompt response and proactive support in our EOBI matter. Their timely guidance and coordination reflect their strong commitment to serving member companies."