Sunday, July 14, 2024

Good News! Govt Announces Big Relief for Freelancers

In the budget for 2023-24, the federal government exempted freelancers from sales tax registration and returns on annual exports of up to $24,000.

During his budget speech in the National Assembly, Ishaq Dar stated that IT and IT Enabled Services are the fastest growing sectors of the economy and account for a significant share of exports; however, this sector is also suffering as a result of global economic problems.

He stated that he believes this sector will continue to be a growth engine in the coming years. Pakistan ranks second in the world in terms of Free Lancers doing business. The following steps are being taken to address their problems as well as the problems of the sector as a whole: A 0.25% income tax break is in effect to encourage exports. This facility, according to the finance minister, will be extended until June 30, 2026. It used to be difficult for freelancers to collect monthly sales tax returns. To help the business environment, Free Lancers have been exempted from sales tax registration and returns on exports up to $24,000 per year.

He stated that IT and IT Enabled Service Providers would be able to import tax-free software and hardware worth 1% of their exports. The annual limit for these imports has been set at $50,000. It will be ensured that IT and IT Services Exporters receive Automated Exemption Certificates.

According to Ishaq Dar, the IT sector has been granted SME status, allowing it to take advantage of lower income tax rates. Venture capital is essential for mentoring IT companies. A Venture Capital Fund will be established with the budgeted 5 billion rupees to provide business capital. The current sales tax rate on ICT-related IT services will be reduced from 15% to 5%.

Banks will benefit from a 20% concessional tax in the IT sector, according to the finance minister, to encourage lending. 50 thousand IT graduates will receive professional training in the coming fiscal year.

Mehjabeen Qasim
Mehjabeen Qasim
Business Journalist at Startup Pakistan

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