Latest news with #SajjadMustafaSyed
Express Tribune
5 days ago
- Business
- Express Tribune
P@SHA Chairman urges government not to introduce any new taxes for IT
The Pakistan Software Houses Association (P@SHA) has called on the federal government to not introduce any new taxation and a business-friendly package for the country's information technology sector in the upcoming fiscal budget, set to be presented on June 10. In a statement to the media, P@SHA Chairman Sajjad Mustafa Syed disclosed that of the $700 million invested in Pakistan's IT industry, $600 million originates from companies affiliated with the association. He emphasised the sector's dependence on stability, consistent policies, and supportive incentives to ensure continued growth. 'We are urging the government to implement a fixed tax regime for the next ten years, from 2025 to 2035, and to commit to this in the FY26 budget,' said Syed. Syed also advocated for the continuation of the 0.25 percent withholding tax rate for companies registered with the Pakistan Software Export Board (PSEB) beyond 2026 under the proposed fixed tax system. Highlighting a disparity in tax rates within the sector, he pointed out that remote IT freelancers face a tax rate of only 1 percent, while salaried employees may pay up to 35 percent in income tax. Syed called on the government to harmonise tax treatment across employment categories in the industry. He also underscored the need to ease the transfer of foreign currency revenues, warning that inconsistent policies may hinder foreign direct investment in Pakistan's tech ecosystem. 'Without decisive, pro-business reforms, nearly 600,000 jobs in the IT sector could be jeopardised,' he cautioned.
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
13-03-2025
- Business
- Express Tribune
P@SHA calls for 10-year tax exemption to boost IT exports
Listen to article The Pakistan Software Houses Association (P@SHA) has urged the government to restore a 10-year tax exemption under the Final Tax Regime (FTR) for IT and IT-enabled services (ITeS) exports from 2025 to 2035 to ensure predictability, continuity, and investor confidence. The IT industry is currently attracting major investments, experiencing operational expansions, and achieving regional diversification in export markets. The FTR allows for a reduced withholding tax rate of 0.25% on export proceeds for entities registered with the Pakistan Software Export Board (PSEB) until the specified date. Therefore, the continuation of the FTR is imperative for sustaining export growth and investment momentum in the IT industry. The FTR for IT and ITeS is set to expire on June 30, 2026. A 10-year tax exemption will accelerate digital transformation, boost investor confidence, and position Pakistan as a leading IT hubaligning with the objectives of the Special Investment Facilitation Council (SIFC) and the prime minister's vision for exponential IT export growth. The continuation of the FTR will simplify tax structures for IT firms and encourage reinvestment by allowing exporters to retain more revenue for business expansion and technological innovation. Additionally, providing tax incentives and ensuring policy-level consistency is essential for creating a favourable business environment for the IT/ITeS industry. P@SHA Chairman Sajjad Mustafa Syed explained that reinstating the FTR for IT and ITeS exports would align Pakistan with regional competitors offering long-term tax incentives to attract foreign direct investment (FDI). The IT sector requires stability and consistency to maintain global competitiveness, increase exports, and create employment opportunities. He maintained that disparities in taxation between salaried employeeswho pay between 5% and 35% in income taxand remote workerswho pay only 0.25% to 1%lead to talent migration, brain drain, and difficulties for local companies in retaining skilled IT and tech professionals. To unlock the industry's full potential, he said, the government must significantly reduce income tax rates for salaried individuals in IT companies. One of P@SHA's key recommendations is to encourage and enable foreign exchange repatriation. Under the current Income Tax Ordinance (ITO), 2001, payments made to non-residents for services rendered in Pakistan are subject to an unfair withholding tax (WHT). Withholding tax rates vary depending on the nature of the payment and the existence of Double Taxation Agreements (DTAs) between Pakistan and the recipient's country. For instance, royalties and fees for technical services paid to non-residents without a permanent establishment in Pakistan are subject to a 15% withholding tax. Saad Shah, an IT exporter and CEO of Hexalyze, urged the government to allocate a budget to support IT-exporting companies exploring emerging and high-potential markets, including Saudi Arabia, the UAE, Qatar, and Singapore. He explained that these markets are investing billions of dollars in various IT sectors, including AI, robotics, cybersecurity, and fintech, offering significant revenue opportunities for service providers. Pakistani exporters have showcased their products and services in recent months and received an encouraging response, he said. The government should also continue enhancing trade relations at the state level through the Ministry of Information Technology and Telecommunication (MoITT), the Pakistan Software Export Board, economic attachés, and diplomatic missions to promote IT business, boosting exports and investment opportunities.
Arab News
10-02-2025
- Business
- Arab News
Pakistani firms eye $50 million business deals at LEAP 2025 tech conference in Riyadh
ISLAMABAD: Pakistani tech companies participating in the four-day LEAP 2025 tech conference in Riyadh are hopeful of attracting business deals worth $50 million at the global tech event, the head of Pakistani software producers' association said on Sunday. The fourth edition of LEAP, recognized as Saudi Arabia's award-winning global technology event, opened on Sunday and will continue till Feb. 12, for which entrepreneurs, investors and startups have converged in Riyadh to present their products to an anticipated audience of over 170,000 visitors. It follows last year's record-breaking LEAP 2024, which saw $13.4 billion in investments and project commitments. Under the theme 'Into New Worlds,' LEAP 2025 aims to expand business networking and investment opportunities in the tech sector. Pakistan recorded the highest-ever monthly IT exports of $348 million in Dec. 2024, up by 15 percent year-on-year and 12 percent month-on-month, according to official data. The LEAP event offers Pakistani firms a platform to collaborate with stakeholders, explore business opportunities and showcase Pakistan's diverse IT exports, including software development, artificial intelligence (AI), blockchain, fintech, gaming and robotics. 'This year, we have one of the largest delegations ever at LEAP, with over 100 companies and more than 1,000 delegates participating,' Sajjad Mustafa Syed, chairman of the Pakistan Software Houses Association (P@SHA), told Arab News over the phone from Riyadh. 'With this strong presence at LEAP, we expect to double our business this year and generate $50 million in deals.' Pakistani IT companies continue to maintain a strong presence in the Kingdom and this year some of the biggest names, including Systems Limited, Abacus and Excellence Delivered, are participating in the mega tech event, according to the P@SHA chairman. In addition, several startups, around 20 companies sponsored by P@SHA, and a few more sponsored by the Pakistan Software Export Board (PSEB) are attending the event, while some Pakistani firms have joined independently. Syed said Saudi investors 'responded positively' to Pakistani companies during a meeting of the Pakistan-Saudi Business Forum that was held ahead of the LEAP inauguration. 'There is growing excitement about Pakistan's IT industry, which has now firmly arrived on the global stage,' he said. 'We are no longer at the startup or entry level rather we are now a recognized force in the global tech landscape, and this recognition is evident in Saudi Arabia.' Syed said Pakistan's tech solutions were 'at par with the best in the world, if not superior.' 'Our companies are making strides in high-tech sectors such as artificial intelligence and cybersecurity,' he added. Former P@SHA chairman Muhammad Zohaib Khan, whose e-solutions company A2Z Creatorz is participating in LEAP, said the event has enabled many Pakistani firms to establish businesses in the Kingdom over the past few years. 'Our participation in LEAP 2024 was a huge success as around 25 Pakistani companies registered in the Kingdom after that and secured some good business deals,' he told Arab News. 'This year, we hope more companies will have the opportunity to register in the Kingdom through collaborations with Saudi firms and secure significant business by establishing offices in Saudi Arabia.' Pakistan's ambassador to Saudi Arabia, Ahmad Farooq, said the LEAP conference has developed into one of the foremost global IT events since 2022. 'The participation of over 100 Pakistani IT companies at LEAP 2025 is a testament to Pakistan's growing strength in the global technology sector,' he said. He said the Pakistani IT industry is offering cutting-edge solutions in AI, cloud computing, cybersecurity and software development, making Pakistan a key player in digital transformation. 'To further strengthen collaboration and engagement, I had the pleasure of hosting a networking dinner in Riyadh on February 8, bringing together over 400 distinguished guests, including business leaders, investors, and technology experts,' he said, adding that Saudi Arabia's Vision 2030 presents immense opportunities and Pakistan is committed to fostering deeper cooperation through innovation in the region. The LEAP tech conference plays a critical role in Saudi Arabia's ambition to become a global technology hub, aligning with its Vision 2030 plan to diversify the economy. As part of the initiative, the Kingdom has pledged $100 billion toward advancing its technology sector. LEAP 2025 will debut Tech Arena, a platform for emerging innovations, featuring a 'Live TV' stage hosted by BBC Click's Lara Lewington and Spencer Kelly. It is one of two new segments at LEAP 2025, alongside the SportsTech stage, supporting Saudi Arabia's Vision 2030 for innovation and technological growth. Visitors will explore AI, mixed reality, fashion tech, and brain-computer interfaces. Key highlights include Anouk Wipprecht's Tech Couture exhibit, Adobe's 'Project Primrose' digital dress technology, and Aramco-backed Terra Drone's long-range medical delivery system. Saudi oil giant Aramco will also showcase SARA, an AI-driven assistant for decision-making. Engine VR will present its Golden Gloves VR boxing platform with live demos by UFC fighter Andrew Sanchez, while Alwaleed Philanthropies will showcase its Atlai AI program to support global deforestation monitoring. XPANCEO will introduce smart contact lenses with integrated computing.
