FBR announces 5% tax on IT sales

The Federal Board of Revenue (FBR) has issued a notice to reduce IT services and IT services sales tax for Islamabad region.

Chairman Pakistan Software Houses Association ([email protected]) has tweeted the notification and thanked ex-prime minister Shahid Khaqan Abbasi and Minister IT Anusha Rehman for the efforts to make it happen.

The previous sales tax on IT services was much higher than 5%, the decision was taken following Digital Pakistan Policy 2018 and approved by the PMLN government during last days at the office. Digital Pakistan Policy is focused on providing incentives in order to let the industry flourish.

However, the sales tax reduction is only applicable in Islamabad which people hope to be expanded to other regions of Pakistan as well.

Not only the sales tax, the Digital Pakistan Policy 2018 offer more benefits to the industry including 100% foreign ownership is allowed, allowed 100% repatriation of capital and dividends which is subject to state bank of Pakistan’s approval. Income tax exemption till June 2024 on the revenues gained from IT exports. Income tax holiday for Venture Capital firms/funds until June 2024.

Some other additional incentives were also incorporated in a newly revised policy which includes; 5% cash reward on IT export remittances, sales tax reduction to 5% on domestic revenues in Islamabad, legislation for new IT parks. Extension of zero-rated tax regime on IT and IT enables services exports until 2025.


Manager at Research Snipers, RS-NEWS, Digital marketing enthusiast and industry professional in Digital Marketing, Social Media, Business News, and Technology News, with vast experience in the media industry, I have a keen interest in business technology, News breaking.

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