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ISLAMABAD: The Federal Board of Revenue (FBR) said on Saturday that amendments to the budget bill had been made to incorporate tangible measures for exporters of computer and IT services, such as reducing the tax rate to 0 .25% on IT export earnings, removing the industry from the simple tax return tax credit scheme and liberalizing withholding tax return filing requirements.

Reacting to Pakistan Software Houses Association (PASHA) statement, “the IT sector was dropped in the 2022-23 budget”, FBR said the statement was based on “lack of information on decisions”.

The board said meetings had been held with IT industry representatives through the Software Export Board (PSEB), as well as with Federal IT Minister Syed Amin-Ul-Haque and his team following Budget’23.

“Virtually all of the IT industry’s key demands have been thoroughly debated and broadly accepted,” FBR said.

The council said the IT sector enjoys a reduced tax rate of 0.25% on its export earnings, a quarter of

the 1% export tax rate applied to all other exporters of goods.

“The sector has been removed from the tax credit scheme to simplify the tax filing system and to remove the compliance hassles that were previously required to qualify them for a 100% tax credit to claim tax exemption .”

The requirements for filing withholding tax (WHT) returns and sales tax reporting have been liberalized for the industry and only those required by law will file withholding tax returns or sales tax returns. sale.

For people with a turnover of up to Rs 100 million a year, there is no need to file a WHT return or deduct tax, the council added.

“Computer and computer services exporters have been given the opportunity to obtain a sales tax refund in respect of any sales tax paid as an input on computers, laptops, other stationary items , etc. This facility is not available for provincial sales. fiscal law.”

FBR said it has accepted the IT industry’s request to reinstate the tax exemption for venture capital funds and the board has created a new provision to exempt venture capital funds from income tax for three year.

The council explained that the definition of computing and computing enabled services as provided by the Income Tax Ordinance 2001 has been liberalized by widening its scope by making appropriate changes and definition comprehensive and “not limited to” has been provided.

FBR stated that the above tax exemptions and facilitations would boost IT and IT services exports have been agreed and discussed in meetings with the Minister of IT and PSEB.

Finance Minister Miftah Ismail also announced the measures in a recent speech to the National Assembly, FBR repeated.

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