A shocking report by the Pakistan Association of IT and ITeS Software Companies (P@SHA) shows that after the recent abolition of tax deductions for the IT industry, Pakistan has become the worst-operated country in the IT industry until 2025.
Major countries. However, India’s IT industry is in a leading position with the most installations, while Pakistan’s installations and profits have dropped to zero. P@SHA’s tweet wrote: “Tax exemption is the biggest benefit Pakistan has given. With the recent changes in the tax system, it has also been harmed.”
P@SHA published a comparative assessment of Pakistan and the major countries in the region (including India, China, and Bangladesh) tax incentives. P@SHA emphasized that export duty-free, special economic zones, duty-free imports, and cash incentives are some of the main benefits provided in these countries.
P@SHA has previously warned about the negative impact of the cancellation of tax exemption on Pakistan’s IT exports. It turns out that until 2025, IT export tax exemption proved to be the only substantive support for IT departments, replaced by a complex tax credit system, full of additional compliance requirements, and will have a negative impact on IT export growth Trends, he said, While urging the Prime Minister to take immediate action.
The FBR started to identify individuals and businesses that took advantage of the tax exemptions/concessions granted by the Income Tax Regulations of 2001. This is reportedly part of a broader crackdown. According to the policy, 70,000 individuals will be notified to collect taxes of Rs 10 crore paragraph.
Payoneer, the only major international payment gateway operating in the country, has also come under fire and has aroused criticism from various IT stakeholders, including members of the IT industry and the IT minister himself, who have issued multiple statements.
Judging from the government’s absurd fiscal policy, even Bangladesh seems to be improving in terms of tax incentives. Its foreign exchange reserves are worth 41 billion U.S. dollars, while Pakistan’s is 20 billion U.S. dollars.