Federal Board of Revenue has informed the decrease in Sales Tax for IT Sector and Information enabled services for Islamabad region. In a tweet by Mr. Barkan Saeed, Chairman Pakistan Software Association (PASHA), the sales tax for IT Sector will be set at 5 percent for Islamabad and other federal regions.
Not to mention, the change is in-line with Digital Pakistan Policy permitted by previous government in its last week that promised major incentives for IT industry. It is expected that other provinces will follow suit and a decrease in sales tax for IT Sector will be announced in rest of Pakistan as well.
According to Digital Pakistan Policy 2018, here are some other reasons that Government will offer to IT industry:
• 100% foreign ownership allowed
• 100% return of capital & dividends (subject to SBP Approval)
• IT & ITeS Export Income Tax exemption till June 2019 (Extended till 2024 just recently)
• Income tax holiday for Venture Capital companies/funds till June 2024
Furthering the enabling atmosphere for the sector, additional Motivations were publicized in the recently approved policy that contains:
• Extension of zero-rated tax regime on IT/ITeS exports till 2025
• 5% cash reward on IT export remittances
• Decrease of sales tax to 5% on domestic revenues in Islamabad capital zones (ICT)
• Regulation for Tech SEZs and new IT Parks.