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Business Recorder
6 days ago
- Business
- Business Recorder
‘IT exporters, freelancers': SBP eases reporting formats
KARACHI: The State Bank of Pakistan (SBP) has revised the reporting formats of the electronic Proceed Realization Certificate (ePRC) and Statement of PRCs (S-PRCs) to facilitate IT exporters, freelancers, and other service providers. The revision of the electronic certificate format has been along-standing demand of IT companies and freelancers to report their foreign exchange income in local and foreign currency for the purpose of tax payments. The banking regulator advised banks to ensure issuance of ePRC andS-PRCs, as per the new formats w.e.f. the 1st October 2025. Any system-related developments should be made at the earliest to ensure compliance with the above timeline, the circular issued by the SBP stated. IT exports grow 25pc in 9MFY25: minister The banking regulator introduced electronic certificates for reporting foreign remittances, e-PRC and S-PRCs, in August 2022; however, it requires updates from time to time since its utility has increased significantly. PRC is a proof of funds issued by banks when a customer receives them from abroad in his account in Pakistani rupee. It shows that funds such as workers' remittances, export proceeds, equity investments, and borrowing from abroad have been received from abroad and realised in Pakistan in rupees. The beneficiary of funds can obtain this certificate (e-PRC) upon receipt of funds in his bank account in Pakistan, or as cash over the counter, from a bank. Furthermore, banks will issue a statement of PRCs (S-PRC) electronically to their customers, mentioning all remittances received by them from abroad during a year. Chairman and Co-Founder Pakistan Association of Freelancers (PAFLA) Ibrahim Amin said that the revised format of earning details will benefit freelancers and country alike as their tax dedication will not be made multiple times; hence, they will be able to save their hard-earned money and share foreign exchange more with the country. The new format will also facilitate the tax authority to deduct tax on the current income of freelancers rather than overall income based on the bank statement that also included income from other resources of the freelancers. Over $400 million IT remittances were received in the nine months of the current financial year whereas the IT exports stood at $2.7billion during the same period. Senior Vice Chairman (PASHA) Muhammad Umair Nizam said the country may receive an increase of foreign exchange from the IT exporters same as it witnessed the revision of retention rate in the foreign exchange bank account for IT companies and freelancers. He praised the efforts of the IT association, the concerned ministry, Pakistani Software Exports Board (PSEB) and Special Initiative Facilitation Council (SIFC) for addressing the issues of IT exporters timely for a long-term and sustainable growth of exports and industry. He urged the government for addressing key issues of the IT industry related to taxes at the earliest for supporting exports of IT and IT-enabled services to grow further for achieving the target of $25billion per annum by FY29. Copyright Business Recorder, 2025
Express Tribune
11-06-2025
- Business
- Express Tribune
'Tax physical retailers, not budding e-commerce'
Listen to article Tech experts have pleaded for the withdrawal of taxes on the IT sector, digital services, and e-commerce to maintain momentum in digital transformation and economic documentation. They urged the government to support sectors that bring in foreign exchange and investment, generate employment, and contribute tax revenue, rather than restricting growth through discouraging tax measures. However, they praised the government for allocating funds for IT infrastructure development and human resource training. Pakistan Freelancers Association (PAFLA) Chairman and Executive Member of Digital Nation Pakistan, Ibrahim Amin, highlighted the importance of policy continuity. He suggested that the government extend the 0.25% Final Tax Regime for freelancers and IT exporters until 2035 to boost confidence, encourage compliance, and enhance remittances. He said the proposed 5% tax on social media advertising could indirectly affect the income of IT companies and freelancers, which may negatively impact IT foreign exchange inflows. "As per estimates, IT exports will surge to over $3.5-$4 billion, and remittances from freelancers will increase to more than $500 million by the end of the current financial year. If we want to sustain this growth, the government, along with stakeholders, should support these sectors with tax exemptions and incentives," he said. The services sector has shown steady growth in IT and e-commerce. In May 2025 alone, 718 new companies were registered in these sectors, according to data released by the Securities and Exchange Commission of Pakistan (SECP). Saad Shah, CEO of Ucaaza retail chain and e-commerce storesaid the introduction of new taxes on e-commerce customers and vendors could slow down the sector's growth and its contribution to the broader economy, including digitisation and documentation. He noted that e-commerce still holds an insignificant share of the overall retail market, but its rapid expansion is attracting both local and foreign investment. However, the new taxes will shake the confidence of major stakeholders in Pakistan's e-commerce ecosystem. He pointed out that a significant segment of e-commerce contributes tax revenues, unlike the wider retail sector comprising shopping centres and wholesale markets. He added that instead of broadening the tax base, the government is overburdening existing taxpayers. The government has introduced the Digital Presence Proceeds Tax Act, 2025, in the finance bill. It targets entities with significant digital sales in Pakistan conducted through foreign-registered companies. Under this act, a 5% tax will be levied on the invoiced amount for goods and services. Additionally, the withholding tax rate on online and e-commerce transactions has increased from 1% to 2%, while an 18% GST has been imposed on goods purchased via local e-commerce vendors. Mehwish Salman Ali, a tech expert and member of the P@SHA committee, urged the government to strengthen the IT and digital business ecosystem through favourable policies, including tax exemptions and incentives. She warned that if government policies discourage investors and business owners, job creation would be affected, and ultimately the fruits of training new talent would not be reaped at an optimal level. She praised the allocation of Rs4.3 billion for the capacity building and skill development of 161,500 students, including 56,000 in IT-related fields. The IT industry is facing a serious shortage of human resources, and investing in youth to equip them with emerging skills is crucial, she added.
Business Recorder
29-05-2025
- Business
- Business Recorder
Empowering freelancers: PAFLA, Innovista forge partnership
KARACHI: The Pakistan Freelancers Association (PAFLA), the national-level representative body of freelancers, and Innovista, a National Initiative of SIFC for collaborative workspaces and innovative platforms, have announced a strategic partnership aimed at creating transformative opportunities, including capacity building and business collaboration more than 50,000 freelancers every year across Pakistan. This landmark collaboration is set to reshape the freelance ecosystem through capacity building, digital infrastructure, and policy advocacy, paving the way for freelancers to play an even more critical role in the national economy. Key initiatives under the PAFLA-Innovista partnership, including the launch of nationwide freelancers training bootcamps, access to co-working and co-learning space at Innovista, creating awareness campaigns on freelancing rights, taxation, and global platforms, and on boarding of the freelancers at Innovista, etc. On this development, Ibrahim Amin, Chairman of PAFLA has said that freelancers are no longer just a side segment of the workforce; they are front and centre in Pakistan's digital economy with more than $500million contribution to bring in foreign exchange in Pakistan. He informed that this partnership with Innovista aligns perfectly with the mission to empower freelancers, advocate for policy reforms, and ensure their contributions are formally recognized in Pakistan's economic framework. 'Freelancers are helping bridge foreign exchange gaps and creating self-sufficiency across sectors, as they deserve infrastructure and recognition at par with traditional sectors,' he added. Pakistan has emerged as one of the top five countries contributing to the international gig workforce with strength of around 2.37 million and increasing across the country, he further said. CEO Innovista Hasham Sarwar said that the PAFLA-Innovista partnership is focused on providing training, technology access, financial literacy, and global client connectivity to unlock the full potential of Pakistan's freelancers, aiming to enhance employability and position Pakistan on a global stage. Through this partnership, Innovista will deploy its digital tools, learning modules, and community engagement resources to create an inclusive environment for Pakistani freelancers, especially women and youth in underserved regions, he said. The PAFLA has registered more than 0.1 million freelancers as members' community with its significant representation across the country. The association was taken organised 35 seminars and 25 training sessions, including with Google Inc. Copyright Business Recorder, 2025
Express Tribune
28-05-2025
- Business
- Express Tribune
IT sector seeks policy continuity
Pakistan Freelancers Association Chairman Ibrahim Amin cautioned against increasing tax rates on freelancers, who already pay taxes on every transaction in addition to fees charged by freelancing platforms and payment gateway service providers. photo: REUTERS Listen to article Key stakeholders of the IT industry have urged the government to continue reforms and extend incentives for the significant growth of the IT sector and its allied fields to enhance export earnings and create jobs for youth, in line with the objectives of the futuristic "Uraan Pakistan" economic plan. They called for incorporating their recommendations in the upcoming federal budget 2025-26 to enable the IT sector to grow faster, generate more employment opportunities, and contribute more effectively to strengthening the national economy. They also stressed the need for continuity of existing policies and resolution of regulatory and tax-related challenges in the finance bill for 2025-26, particularly for the IT industry and freelancers, to help accelerate sectoral growth and development. Khushnood Aftab, Convener of the IT Committee at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), recommended that the government reduce import duties on essential hardware components such as RAM, SSDs, motherboards, batteries, and displays. This would support the local assembly of fully built imported devices like laptops, desktops, and tablets, fostering local value addition and attracting investment in domestic production facilities. He noted that increased support for the localisation of computer devices and hardware accessories could help Pakistan conserve foreign exchange, create skilled jobs, and position itself as a competitive exporter in regional markets. The locally branded IT hardware sector, he added, deserves focused attention as it directly aligns with the "Made in Pakistan" initiative and the broader Digital Pakistan vision. Furthermore, he emphasised the urgent need for the fair inclusion of local brands in government procurement, which would encourage scale, improve quality, and support domestic industry without compromising standards. Pakistan must also prepare for the growing demand for AI-integrated hardware and edge computing devices, he said, which could be achieved through the introduction of targeted Research and Development (R&D) tax credits and innovation grants to support companies working on emerging technologies within the country, said Khushnood Aftab, who is also Chairman Viper Group. Muhammad Umair Nizam, Senior Vice Chairman of the Pakistan Software Houses Association (P@SHA), said the IT sector is a key driver of economic growth, job creation, and foreign investment. He stressed that extending the Final Tax Regime (FTR) for the next decade would provide the policy stability necessary to encourage reinvestment and help Pakistan maintain its competitive edge in global markets. He also urged the government to harmonise the definitions of IT and Information Technology Enabled Services (ITeS) across federal and provincial tax laws to ensure consistency, eliminate jurisdictional ambiguities, and reduce compliance burdens. A unified framework, he said, would enhance investor confidence, streamline taxation, and promote sectoral growth by creating a predictable regulatory environmentultimately strengthening Pakistan's digital economy and competitiveness. Equally important, he said, is reducing income tax for salaried IT professionals, which would help retain top talent and mitigate the ongoing brain drain. Pakistan Freelancers Association Chairman Ibrahim Amin cautioned against increasing tax rates on freelancers, who already pay taxes on every transaction in addition to fees charged by freelancing platforms and payment gateway service providers. He recommended that the government exempt freelancers and IT companies from withholding tax (WHT) on international transactions under the Exporters' Special Foreign Currency Account (ESFCA) in the upcoming finance bill, following the concurrence of the Ministry of Finance and Revenue. He also urged the finance division to ensure that all features of the Roshan Digital Account (RDA) be extended to ESFCAs for IT companies and freelancers, enabling them to benefit from streamlined banking services and improved access to capital.
Business Recorder
24-05-2025
- Business
- Business Recorder
Freelance services: annual foreign exchange inflows may reach $500m in Pakistan
KARACHI: Annual foreign exchange inflows from freelance services are rapidly growing and expected to reach $500 million in the current fiscal year (FY25), marking a significant contribution to the national exchequer. As the global nature of work undergoes rapid transformation, Pakistan is witnessing a powerful surge in the freelancing economy. With over 70 percent of its population under 30, the country is fast becoming a hub for digital talent. Ibrahim Amin, Chairman of the Pakistan Freelancers Association (PAFLA) has emphasised the critical role freelancers now play in Pakistan's economic stabilisation, especially in the face of recurring trade and currency imbalances. Minister meets freelancers and content creators 'These aren't just individual success stories. This is sustainable, scalable foreign income entering Pakistan without factories, raw materials, or traditional exports. It's smart economics,' he added. He said that PAFLA fully supporting the freelancers to contribute in the economic growth and is also in dialogue with federal and provincial governments to shape national policy frameworks. These include proposals for tax incentives, simplified account registration, lower transaction fees on remittances, and legal protections for freelancers, he added. Powered by the digital revolution, increased internet access, and global freelancing platforms like Upwork, Fiverr, and tens of thousands of Pakistanis now offer services worldwide, from the US and UK to the Middle East and Europe. According to the State Bank of Pakistan, freelance exports officially brought in over $400 million in the last fiscal year, poised to grow as more youth join the remote workforce. 'With the current pace of growth, we are expecting that freelance exports will cross $500 million during this fiscal year', Amin said and added 'These inflows support thousands of households while strengthening Pakistan's global digital reputation across IT, design, digital marketing, and content development sectors.' Despite this momentum, Amin pointed out several structural challenges, chief among them being the lack of access to international payment gateways like PayPal, unclear taxation policies, and the absence of freelancer-centric banking products. Copyright Business Recorder, 2025
