The Pakistan Software Export Board (PSEB) registered freelancers’ local services revenue would be subject to a lower sales tax rate of no more than 2 percent, according to the “National Freelancing Policy” that the Ministry of Information Technology and Telecommunication has drafted.
According to sources, the goal of the policy was to make Pakistan a major international market for freelancers and to boost exports and foreign exchange earnings.
In accordance with the policy, the PSEB will cooperate with the SBP to simplify inward foreign exchange transfers from freelancer activity using SBP-defined freelancing codes that are exempt from income tax.
The Pakistan Software Export Board will collaborate with the SBP to let registered freelancers to open foreign currency bank accounts.
The SBP will permit freelancers to keep 35% of the foreign exchange income they get as inbound remittances in these foreign exchange business accounts.
PSEB Collaboration with Ministry of Finance and FBR
To ensure that the foreign exchange export remittances received in freelancing codes will continue to be income tax exempt until 2030, the Pakistan Software Export Board will collaborate with the Ministry of Finance (MoF) and the FBR.
Freelancers having a minimum of two years of IT and ITeS export remittances exceeding $5,000 per year through official banking channels are eligible for visa facilitation.
Subsidized home loan programs are available for registered freelancers under current and upcoming government and commercial efforts, provided they can demonstrate a history of sending at least $12,000 or more in export payments over the course of at least five years.
The firm’s development placed a strong emphasis on giving independent contractors access to global markets, projects, and clients as well as on developing a strong marketing strategy and promotional plan specifically for freelancers.
According to the proposed policy, the PSEB will offer registration for freelancers for Rs 1,000 and renewal for Rs 3,500 annually to access Pakistan Software Export Board programs and initiatives, including free and subsidized training, certifications, discounted office space at Software Technology Parks (STPs) across the country, access to international marketing, and matchmaking opportunities.
The Pakistan Software Export Board will set up an assistance desk for freelancers at the Pakistan Software Export Board office and at the PSEB-run STP to handle issues with registrations, taxes, banking, intellectual property (IP) rights, VoIP whitelisting, VPN access, dispute resolution, and any other legal or business issues.
Assist freelancers in opening bank accounts, enabling e-payments, giving them access to other financial instruments, raising export remittances, and streamlining outward remittances for buying services, software, tools, and digital platforms by offering digital banking channels to them.
At least six cities in Pakistan will get bank technology branches where tech-savvy bank employees can assist freelancers. The Pakistan Software Export Board will collaborate with the SBP, banks, and other organizations to provide these branches’ staff with pertinent training.
Through current and future initiatives of banks and financial institutions, the PSEB will work with relevant government and private sector organizations to provide subsidized, collateral-free loans up to Rs. 1 million for licensed freelancers.
Grant registered freelancers a tax break on their export-related income, revenue, and receipts through established banking channels as long as they fall within one of the SBP’s designated specific purpose codes until 2030.
Through current and upcoming subsidies and initiatives, the Pakistan Software Export Board will work with relevant public and private sector organizations to offer registered freelancers discounted health insurance, life insurance, and employee liability insurance.
For registered freelancers, the PSEB will introduce new training and technology certification initiatives in collaboration with other public and private sector organizations.
For the purpose of funding the course materials and certificates and making them accessible to the registered freelancers, the PSEB will form partnerships with IT MNCs.
To read our blog on “Allow freelancers to open FCY accounts, PSEB suggests SBP,” click here.
