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Business Recorder
21-05-2025
- Business
- Business Recorder
Pakistan's IT, ITeS sector: P@SHA underscores need for consistent tax policy
ISLAMABAD: The Pakistan Software Houses Association (P@SHA) has strongly recommended a consistent tax policy with no changes in the tax structure of IT and IT-enabled Services (ITeS) sector in the Federal Budget 2025-26. Addressing at a press conference here on Tuesday, Sajjad Mustafa Syed, Chairman P@SHA stated that the government must ensure policy stability and tax clarity for the IT and IT-enabled Services (ITeS) sector in 2025–26. As a cornerstone of Pakistan's digital economy, the IT industry has demonstrated resilience amid economic turbulence, contributing USD 3.2 billion in exports in 2023–24, and is projected to close the current fiscal year at nearly USD 4 billion. Forecasts estimate a USD 15 billion export potential by 2030. Despite these promising numbers, policy inconsistency, ad hoc taxation, and operational challenges continue to undermine investor confidence and economic contributions, he regretted. Policy stability is essential for sustaining the momentum we've recently achieved. The recent DFDI event alone resulted in over USD 700 million in investment commitments — of which USD 600 million was facilitated by P@SHA, he said. Frequent changes in tax laws — whether related to export incentives, withholding taxes, or other fiscal instruments — discourage long-term investment. The lack of predictability threatens to undo the combined efforts of public and private sector stakeholders, including MOITT, PSEB, SIFC, and TDAP. If investor confidence is shaken, Pakistan risks forfeiting years of progress, including advances in branding, skill development, and digital infrastructure, he added. 'We are not asking for exemptions that jeopardize international obligations. However, if our practical, fair recommendations are implemented in both letter and spirit, Pakistan's IT sector can contribute substantially more to national growth,' Sajjad said. He recommended there is a critical need to align tax treatment between employees of IT firms and independent remote workers. The P@SHA urged the government to formally define remote workers in the Income Tax Ordinance (2001). The proposed classification applies to individuals earning over Rs 2.5 million annually through foreign remittances or working with fewer than three international clients, taxing them similarly to salaried individuals. This recommendation aims to expand the tax base while leveling the playing field. The current disparity creates an uneven labor market where it's more cost-effective for global companies to hire Pakistani talent directly rather than through local firms. As a result, local IT businesses lose both competitiveness and valuable export revenue. A clear and fair framework will bring transparency for taxpayers and authorities alike and help protect Pakistan's economic interests. IT firms, especially call centres and BPOs, operate on narrow margins, have service level agreements and cannot afford such disruptions. Legislation must be enacted to shield them from outdated and misaligned labor regulations. Until reforms are complete, temporary exemptions must be provided to IT companies from EOBI and other arcane labor laws. Despite being one of the region's lowest revenue-per-employee markets, Pakistan's IT sector employs a massive formal workforce of over 600,000. The sector's resilience is remarkable, bearing some of the highest input costs, yet continuing to grow. Copyright Business Recorder, 2025
Business Recorder
21-05-2025
- Business
- Business Recorder
IT, ITeS sector: P@SHA underscores need for consistent tax policy
ISLAMABAD: The Pakistan Software Houses Association (P@SHA) has strongly recommended a consistent tax policy with no changes in the tax structure of IT and IT-enabled Services (ITeS) sector in the Federal Budget 2025-26. Addressing at a press conference here on Tuesday, Sajjad Mustafa Syed, Chairman P@SHA stated that the government must ensure policy stability and tax clarity for the IT and IT-enabled Services (ITeS) sector in 2025–26. As a cornerstone of Pakistan's digital economy, the IT industry has demonstrated resilience amid economic turbulence, contributing USD 3.2 billion in exports in 2023–24, and is projected to close the current fiscal year at nearly USD 4 billion. Forecasts estimate a USD 15 billion export potential by 2030. Despite these promising numbers, policy inconsistency, ad hoc taxation, and operational challenges continue to undermine investor confidence and economic contributions, he regretted. Policy stability is essential for sustaining the momentum we've recently achieved. The recent DFDI event alone resulted in over USD 700 million in investment commitments — of which USD 600 million was facilitated by P@SHA, he said. Frequent changes in tax laws — whether related to export incentives, withholding taxes, or other fiscal instruments — discourage long-term investment. The lack of predictability threatens to undo the combined efforts of public and private sector stakeholders, including MOITT, PSEB, SIFC, and TDAP. If investor confidence is shaken, Pakistan risks forfeiting years of progress, including advances in branding, skill development, and digital infrastructure, he added. 'We are not asking for exemptions that jeopardize international obligations. However, if our practical, fair recommendations are implemented in both letter and spirit, Pakistan's IT sector can contribute substantially more to national growth,' Sajjad said. He recommended there is a critical need to align tax treatment between employees of IT firms and independent remote workers. The P@SHA urged the government to formally define remote workers in the Income Tax Ordinance (2001). The proposed classification applies to individuals earning over Rs 2.5 million annually through foreign remittances or working with fewer than three international clients, taxing them similarly to salaried individuals. This recommendation aims to expand the tax base while leveling the playing field. The current disparity creates an uneven labor market where it's more cost-effective for global companies to hire Pakistani talent directly rather than through local firms. As a result, local IT businesses lose both competitiveness and valuable export revenue. A clear and fair framework will bring transparency for taxpayers and authorities alike and help protect Pakistan's economic interests. IT firms, especially call centres and BPOs, operate on narrow margins, have service level agreements and cannot afford such disruptions. Legislation must be enacted to shield them from outdated and misaligned labor regulations. Until reforms are complete, temporary exemptions must be provided to IT companies from EOBI and other arcane labor laws. Despite being one of the region's lowest revenue-per-employee markets, Pakistan's IT sector employs a massive formal workforce of over 600,000. The sector's resilience is remarkable, bearing some of the highest input costs, yet continuing to grow. Copyright Business Recorder, 2025
Express Tribune
21-05-2025
- Business
- Express Tribune
IT reforms sought to halt exodus
P@SHA has said that the govt will have to decide the future course – either develop the country as a digital powerhouse or remain confined as skilled individuals leave the country. photo: file Listen to article The information technology (IT) sector has warned the government that companies will shift to other countries if favourable policies are not introduced and changes are made in the existing tax regime. Addressing a news briefing on Tuesday, Pakistan Software Houses Association (P@SHA) Chairman Sajjad Syed said that investments were not brought into the country by the government in public sector industries. "Investments are invited by the private sector and the government functionaries have to be facilitators; this includes branding, infrastructure development, skill development as well as the tax and fiscal regime," he said. Syed pointed out that currently Pakistan had one of the highest tax rates and negligible certainty about the consistency of policies. He said corporate income tax was 29% in Pakistan, whereas it was as low as 9% in the United Arab Emirates (UAE) and 25% in Vietnam, which had annual IT exports of $141 billion. Other taxes and input costs were also high in Pakistan. Syed added that the IT industry had demonstrated resilience in the face of economic turbulence, contributing $3.2 billion in exports in financial year 2023-24 and it was projected to close the current fiscal year at nearly $4 billion. "An estimated $15 billion export potential is projected by 2030, but more promising numbers can be achieved if there is policy consistency, a long-term taxation regime and operational facilitation by the government to boost investor confidence," the P@SHA chairman remarked. Among the issues highlighted by the association were the need to align tax treatment between the employees of local IT firms and the independent remote workers employed by foreign companies. P@SHA asked the government to formally define remote workers in the Income Tax Ordinance 2001 as the lacuna was forcing IT companies to collect an additional 30% income tax from employees earning over Rs2.5 million annually, whereas those working for international clients did not have to pay high taxes. "This high income tax on local companies has encouraged international competitors to hire the same human resources in Pakistan at higher wages and even save some amount by paying a low income tax," Syed added. P@SHA also demanded that the government ensure continuity in tax policy and added that the IT sector in Pakistan was still in its formative growth stage. He added that policy stability was essential for sustaining the momentum and referred to a Digital Foreign Direct Investment (DFDI) event, where over $700 million worth of investment commitments were made, of which $600 million was facilitated by P@SHA. "If the tax regime is changed in the upcoming budget, there will only be two choices: either the clients leave Pakistani companies as the cost of business will increase or we shift to any conducive market like the UAE, Vietnam or the Philippines," Syed said. P@SHA has said that Pakistan's IT sector employs over 600,000 skilled human resources, but the government has to decide the future course – either develop the country as a digital powerhouse by promoting artificial intelligence or remain confined at the secondary level as high-end skilled individuals will leave the country to seek jobs abroad.
Cision Canada
13-05-2025
- Business
- Cision Canada
MindHYVE.ai™ Commits $22M FDI to Pakistan, Launches National AI Digital Transformation Push
ISLAMABAD and NEWPORT BEACH, Calif., May 13, 2025 /CNW/ -- a California-based artificial intelligence company competing with OpenAI and Google in the AI space with a unique suite of large reasoning models and AGI agents has announced a $22 million foreign direct investment into Pakistan to establish it as a global hub for applied AI innovation. The announcement was made by Founder & CEO Belal Faruki during the Digital Foreign Direct Investment (DFDI) Conference, which took place April 29–30, 2025, in Islamabad, Pakistan, in the presence of Prime Minister Shehbaz Sharif, federal ministers, international delegates, and global tech leaders. "This isn't outsourcing—this is digital nation-building," said Belal Faruki. "We're not just bringing capital—we're bringing our most advanced agentic, autonomous systems, large reasoning models, AI knowhow and co-creating sovereign AI solutions with Pakistan." Key Strategic Initiatives outlined a five-year plan to: Launch three AI Labs in Islamabad, Lahore, and Karachi for R&D, workforce training, and entrepreneurship. Seed 20–30 AI-powered startups across strategic verticals. Hire 1,500–5,000 professionals, empowering them with AI fluency to scale local expertise. Expand AI in education, including pilots in Kohat and the upcoming national deployment of ArthurAI™, a revolutionary AGI-powered learning platform. Deploy agentic systems in healthcare, enabling precision diagnostics, intelligent treatment planning, and improved patient outcomes. Partner with NGOs, the Higher Education Commission, Federal Ministry of Education, SIFC and other ministries to implement AI across public sector operations. Pakistan: The First AGI Frontier This investment represents the first national-scale deployment of U.S.-engineered agentic systems—placing Pakistan at the forefront of sovereign AI development. The delegation was later hosted at a private dinner by Prime Minister Shehbaz Sharif at the Prime Minister's House, where long-term digital infrastructure partnerships were further explored. Pakistan has the population, the talent, and now the technology," said Belal Faruki. "This is digital self-determination in action." About Headquartered in Newport Beach, California, builds domain-specific AGI agents, autonomous and semi-autonomous agentic systems, and domain specific large reasoning models to transform national infrastructure and industry through intelligent automation and decision systems.
Yahoo
13-05-2025
- Business
- Yahoo
MindHYVE.ai™ Commits $22M FDI to Pakistan, Launches National AI Digital Transformation Push
ISLAMABAD and NEWPORT BEACH, Calif., May 13, 2025 /CNW/ -- a California-based artificial intelligence company competing with OpenAI and Google in the AI space with a unique suite of large reasoning models and AGI agents has announced a $22 million foreign direct investment into Pakistan to establish it as a global hub for applied AI innovation. The announcement was made by Founder & CEO Belal Faruki during the Digital Foreign Direct Investment (DFDI) Conference, which took place April 29–30, 2025, in Islamabad, Pakistan, in the presence of Prime Minister Shehbaz Sharif, federal ministers, international delegates, and global tech leaders. "This isn't outsourcing—this is digital nation-building," said Belal Faruki. "We're not just bringing capital—we're bringing our most advanced agentic, autonomous systems, large reasoning models, AI knowhow and co-creating sovereign AI solutions with Pakistan." Key Strategic Initiatives outlined a five-year plan to: Launch three AI Labs in Islamabad, Lahore, and Karachi for R&D, workforce training, and entrepreneurship. Seed 20–30 AI-powered startups across strategic verticals. Hire 1,500–5,000 professionals, empowering them with AI fluency to scale local expertise. Expand AI in education, including pilots in Kohat and the upcoming national deployment of ArthurAI™, a revolutionary AGI-powered learning platform. Deploy agentic systems in healthcare, enabling precision diagnostics, intelligent treatment planning, and improved patient outcomes. Partner with NGOs, the Higher Education Commission, Federal Ministry of Education, SIFC and other ministries to implement AI across public sector operations. Pakistan: The First AGI Frontier This investment represents the first national-scale deployment of U.S.-engineered agentic systems—placing Pakistan at the forefront of sovereign AI development. The delegation was later hosted at a private dinner by Prime Minister Shehbaz Sharif at the Prime Minister's House, where long-term digital infrastructure partnerships were further explored. "Pakistan has the population, the talent, and now the technology," said Belal Faruki. "This is digital self-determination in action." About Headquartered in Newport Beach, California, builds domain-specific AGI agents, autonomous and semi-autonomous agentic systems, and domain specific large reasoning models to transform national infrastructure and industry through intelligent automation and decision systems. 📍 | 📧 hello@ | ☎ +1 (949) 200-8668 Media Contact: Marc Ortiz | View original content to download multimedia: SOURCE Inc. View original content to download multimedia: Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
