The government of Pakistani has not shown its clear stance on the subject of the Federal Board of Revenue (FBR) initiating a mass crackdown on Pakistani freelancers, the payment giant Payoneer and other online businesses. The Federal Minister for IT and Telecommunication, Syed Amin Ul Haque has expressed his concern over the FBR’s tax notices. However, the reaction occurs some 20 days after the supposed action of the FBR.
“Today, I’ve expressed deep concern over the FBR’s tax notices to the IT sector, as it’s confusing investors whose exports pave the way of stabilization & remittances.”, the minister stated in a tweet. The minister further gave comments while chairing the 11th meeting of the Prime Minister’s Taskforce on IT & Telecom held in Islamabad on Wednesday.
Just a day before, the secretary of Information Technology and Telecom, Shoaib Siddiqui, had requested the IT division to keep calm and proceed with businesses as normal since the tax exemptions won’t be removed and will extend till 2025. The inconsistency in the government officials’ statements and the premier tax authority’s actions have caused confusion amongst the IT stakeholders concerning whether or not the tax exemptions will stay.
Moreover, Prime Minister Imran Khan, earlier this month sanctioned the introduction of the Money Bill in the National Assembly to withdraw about 80 income tax exemptions and reform the tax laws following the dictation of the IMF, which has urged Pakistan to remove income tax exemptions worth Rs140 billion. The tax amendment law is expected to be introduced in the coming days.
The action to remove tax exemptions invited criticism of the IT industry. A press release issued by the Pakistan Software Houses Association (P@SHA) states that FBR’s approach towards Tax Treatment has been harmful to the IT sector’s development as the policies are majorly based on raising revenue by all means.