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Pakistan IT Exports Top $4.18 Billion as Budget Locks in Multi‑Year Tax Relief

Providing exporters multi‑year certainty with reduced transaction levies, the budget offers short‑term cash‑flow relief rather than a package of infrastructure or skills investments.

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Overview

  • SBP data released Wednesday showed Pakistan’s IT and IT‑enabled services exports reached $4.184 billion in July–May FY2025‑26, a roughly 20 percent increase from the prior year.
  • The federal FY2026‑27 budget extended the 0.25 percent Final Tax Regime for IT exporters to June 2029 and set the tax on IT export earnings at 0.25 percent.
  • The budget also cut the withholding tax on international payment‑card transactions from 5 percent to 0.5 percent and allocated Rs20 billion to the Information Technology and Telecom Division in the PSDP.
  • Freelancers were a major driver of growth, with SBP and industry groups reporting about $1 billion in freelancer earnings and that freelancers contribute more than 20 percent of sector receipts, though exact figures vary by source.
  • Industry analysts say the measures improve predictability and cash flow but stop short of transformational change because they do not fund broadband, spectrum, data centres, cybersecurity or large‑scale skills training, and exports may rise toward $4.5 billion by year‑end but still risk missing the government’s $5 billion target.