The Pakistan Freelancers Association (PAFLA) has urged the Federal Board of Revenue (FBR) and the Ministry of Finance to maintain support for the country's expanding freelancing and digital workforce in the federal budget for 2026-27. PAFLA recommends retaining the reduced tax rate of 0.25 percent on foreign exchange earnings for the next ten years, alongside allocating funds for capacity-building programs, establishing freelancing hubs in multiple cities, and providing subsidies for internationally recognized certifications.
Key Recommendations
PAFLA Chairman Ibrahim Amin emphasized that extending the 0.25 percent tax regime would encourage freelancers to channel their earnings through local banks and inspire students, young professionals, and women to adopt freelancing as a sustainable career path. He noted that freelancers registered with the Pakistan Software Export Board (PSEB) currently benefit from the 0.25 percent rate, and PAFLA is eager to work closely with PSEB to simplify the registration process so more freelancers can access these incentives.
“A stable, simple tax regime benefits the entire digital economy, freelancers, software houses, and the broader IT industry alike,” he said. Citing the International Labour Organization’s recognition of Pakistan as one of the world’s largest providers of digital labor, Chairman Amin added that this reflects the collective strength of Pakistan’s tech and digital ecosystem.
Freelancing Export Growth
According to the State Bank of Pakistan, freelancing export receipts surged to $959 million during July-April FY2025-26, up 49 percent from the same period last year. Dr. Imran Batada, President and CEO of PAFLA, said the government should also refrain from imposing additional taxes on content creators producing knowledge-based content, including skills training, news and analysis, educational content, and infotainment.
He cautioned that complex tax classification mechanisms could push digital workers toward informal channels, reducing documented remittances and weakening Pakistan’s foreign exchange position, an outcome that would affect the entire industry. He also urged the government to invest in improving payment infrastructure, including a globally integrated national payment gateway, a step that would benefit all digital service providers across Pakistan.
Economic Contribution
“Pakistan’s freelancers have contributed nearly $1 billion in foreign exchange this fiscal year. These are young Pakistanis from every corner of the country, competing globally and bringing dollars home. Together with the broader IT industry, they represent Pakistan’s greatest economic opportunity,” Dr. Batada concluded.
