MoITT Concerned After FBR Abolishes Tax Exemption Regime

MoITT Concerned After FBR Abolishes Tax Exemption Regime

The Ministry of Information Technology and Telecommunication (MoITT) on Monday conveyed serious concerns to the Federal Board of Revenue (FBR) over abolishing the tax exemption regime and replacing information technology/ IT-enabled Services (ITeS) with tax credit regime while saying it can result in flight of capital and brain drain in the country.

On the direction of Federal Minister for IT & Telecom and recommendations of Prime Minister’s Taskforce on IT & Telecom, Secretary IT Shoaib Ahmad Siddiqui along with Member (IT) MOIT, Managing Director Pakistan Software Export Board, Chairman PASHA and Chair IT Sub-taskforce called upon Chairman Federal Board of Revenue (FBR) Asim Ahmad and his team in FBR Headquarters on Monday.

MOIT leadership presented a detailed Industry Impact Analysis in result of recent announcements by FBR to abolish the Tax Exemption regime and replacing it with recently announced Tax Credit Regime.


Barkan Saeed Chairman PASHA and Syed Ahmed Chair IT Sub-taskforce raised serious concerns on FBR’s unanimous decision of taking IT/ITES Sector into tax credit regime, without taking Ministry of IT and IT Industry on board.

Secretary IT highlighted this Government’s remarkable achievement in the form of IT/ITES Export figures as Pakistan expects to reach landmark of USD 2 billion export remittances this year. He emphasized that IT Sector is on high priority agenda of Prime Minister and MOIT is leading this agenda to implement it with all available resources to ensure facilitation to IT/ITES and Freelance sectors in the country.

It was shared that all the hard work will be reversed as policy inconsistency never sends a good signal to the domestic and international investors. Forum was apprised that immediate reaction of IT/ITES and Freelance sector, to this policy change, can be in form of flight of capital and brain drain in the country.

Furthermore, MOIT team also presented case studies of MNCs, Pakistani IT Companies and freelancers to sensitize FBR Policy team about recent tax notices and wrong interpretations by Tax Commissioners. It was emphasized that IT/ITES and Freelance sectors are only surplus services sector with a highly positive impact on job market and economic growth in the country.

Tax consultant also highlighted complexities around extra documentation IT/ITES Sector and Freelancers have to face due to tax credit regime which can result into increased cost of doing business for new entrants specially.

Chairman FBR assured that concerns of IT/ITES Sector will be addressed. FBR and MOIT agreed to conduct joint workshops for IT/ITES and Freelance sector to facilitate the industry in tax matters.

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