Budget 2025 is a Death Knell for Pakistan’s IT Industry: P@SHA

According to the Pakistan IT Industry Association (P@SHA), the federal Budget 2025-26 has overlooked some of the most critical needs of the IT and ITeS sector. For a sector that employs over 600,000 skilled youth and drives digital exports, this budget feels less like a setback and more like a warning sign.

The industry has been asking for clarity: a stable 10-year tax policy for exporters and a fair taxation framework for high-earning remote workers. Instead, the budget stays silent on both. Local companies that train and hire talent are taxed and over-regulated, while remote workers employed abroad largely go untaxed. This imbalance is pushing talent away and hurting formal businesses.

P@SHA had proposed a simple fix—classifying individuals earning over Rs. 2.5 million from fewer than three foreign sources as remote workers. The data already exists, and the change could be implemented quickly. Yet, the government has not acted.

With investment commitments now at risk and policy uncertainty on the rise, the message to the global tech world is clear: Pakistan’s digital economy lacks predictability. If this continues, the country’s hopes for IT-led growth may slip out of reach.