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technologyplus.pk
Technolog & Business News from Pakistan

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New Budget Threatens Pakistan’s IT Sector with Higher Taxes and Potential Brain Drain

(GST) on IT hardware has doubled from 5% to 10%, undermining digitalisation efforts

The fiscal year 2024-2025 budget imposes higher income taxes on the skilled salaried class, risking a significant brain drain and stalling the growth of Pakistan’s IT sector. The General Sales Tax (GST) on IT hardware has doubled from 5% to 10%, undermining digitalisation efforts. IT experts fear that these new taxes could devastate the burgeoning sector.

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Professor Tahir Mahmood Chaudhry, Chairman of the Computer Society of Pakistan (CSP), highlighted the critical role of the IT sector in potentially alleviating 15%-30% of Pakistan’s obligations to the IMF and World Bank through IT exports. The fluctuating US dollar had previously benefited local IT companies, but the new tax regime threatens their operations and international competitiveness, making it difficult to transfer money for essential services abroad.

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