The government of Pakistan has now planned to withdraw income tax exemption available to IT services and IT-enabled services through the Income Tax Amendment Bill, 2021.
As per the draft bill, the services provided by the IT sector will be now allowed to avail 100 percent tax credit upon the time of filing of tax returns. The decision of the withdrawal of income tax exemption would be finalized through the Income Tax Amendment Bill, 2021.
In place of this, the Federal Board of Revenue (FBR) will be provided with 100 percent tax credit to the “IT Services” which includes software development, maintenance of software, integration of the system, web design, web development, web hosting, and network design.
This further includes “IT-enabled services” which categorizes inbound or outbound call centers, medical transcription, remote monitoring, graphics design, accounting services, HR services, telemedicine centers, data entry operations, locally produced television programs, and insurance claims processing.
Source: Pro Pakistani