Pakistan’s Information Technology (IT) sector has reached a significant milestone, with exports climbing to an all-time high of $3.8 billion in fiscal year 2025, reflecting an 18% year-on-year growth. This performance underscores the increasing role of the IT industry in Pakistan’s economic landscape, spurred by heightened global demand for digital services.
A key factor behind this growth has been the rise in freelance and remote work, which saw an impressive 90% surge, contributing $779 million to the total export value. This highlights Pakistan’s growing pool of digital talent and its enhanced competitiveness in IT-enabled services on the global stage.
Despite these positive results, industry leaders have raised concerns about the sustainability of this growth. They warn that without stable government policies, the sector may struggle to maintain its upward trajectory. Concerns center around the unpredictability of regulations and the complexity of compliance processes, which could impede future expansion.
The Ministry of IT and Telecom attributes the sector’s success to a combination of strategic priorities, including the global promotion of Pakistan’s IT sector, investments in talent and infrastructure, supportive policies, reliable internet connectivity, and national digital initiatives such as the drive toward a cashless economy.
IT and Telecom Minister Shaza Fatima outlined ambitious goals for the sector, aiming to achieve $15 billion in IT exports by 2030. She emphasized that ongoing reforms would be key to maintaining this growth momentum. However, the Pakistan Software Houses Association (P@SHA) has urged the government to introduce a predictable and long-term tax and regulatory framework to support the IT and IT-enabled services (ITeS) industry.
P@SHA Chairman Sajjad Syed pointed out that tech entrepreneurs often spend considerable time navigating overlapping regulations rather than focusing on creating export-oriented products. He stressed that the sector’s growth would be significantly boosted if regulatory continuity and compliance processes were simplified. “Every serious investor—local or international—asks two critical questions: What will my tax exposure be, and will the rules change after I invest?” he stated.
To address these concerns, the association has proposed several measures, including extending the 10-year Final Tax Regime (FTR) for IT/ITeS export income, addressing tax disparities that negatively impact businesses operating payrolls within Pakistan, and creating a dedicated channel for foreign currency transactions akin to the Roshan Digital initiative.
Other recommendations include revising the super tax for the sector under the FTR, exempting capital gains tax to enhance investor confidence, standardizing provincial sales tax regulations, and consolidating labor-related levies through a unified digital system for the tech industry.
“These proposals are not about subsidies,” emphasized the P@SHA chairman. “They focus on predictability, digitalization, and simplifying administrative processes.” He further noted that many of these reforms could be cost-neutral or even revenue-positive, as they would foster greater compliance, better documentation, and higher export revenues.