The Pakistan Freelancers Association (PAFLA) has called on the Federal Board of Revenue (FBR) and the Ministry of Finance to continue supporting the country’s growing freelance sector by retaining existing tax incentives in the upcoming Federal Budget 2026-27.
The association has recommended maintaining the current 0.25 percent tax rate on foreign exchange earnings for freelancers for at least the next decade. PAFLA believes a stable tax environment is essential for sustaining growth in Pakistan’s digital economy and encouraging more professionals to participate in global freelancing platforms.
In addition to tax relief, the association has proposed several measures aimed at strengthening the sector, including the establishment of freelancing hubs in major cities, expanded capacity-building programs, and financial support for internationally recognized professional certifications.
PAFLA Chairman Ibrahim Amin said extending the low-tax regime would encourage freelancers to channel their earnings through formal banking systems, helping improve transparency while increasing foreign exchange inflows.
He noted that freelancers registered with the Pakistan Software Export Board (PSEB) currently benefit from the reduced tax rate. According to Amin, PAFLA is working closely with PSEB to simplify the registration process so that more freelancers can access available incentives.
He added that a predictable and easy-to-understand tax framework would not only benefit freelancers but also support software houses and the broader information technology sector.
Referring to Pakistan’s growing presence in the global digital workforce, Amin highlighted that the International Labour Organization (ILO) has recognized Pakistan as one of the world’s leading suppliers of digital labor. He said this reflects the rapid expansion of the country’s technology and freelance ecosystem.
Recent figures from the State Bank of Pakistan (SBP) indicate that freelance export earnings reached $959 million during July-April FY2025-26, representing a 49 percent increase compared to the same period last year.
PAFLA President and CEO Dr. Imran Batada urged policymakers to avoid introducing additional taxes on content creators producing educational, informational, and knowledge-based digital content. This includes creators involved in online training, news analysis, educational resources, and infotainment content.
He warned that overly complex tax policies could push freelancers and digital workers toward informal channels, reducing documented remittance flows and potentially impacting foreign exchange earnings.
Dr. Batada also emphasized the need to modernize Pakistan’s payment infrastructure. He called for the development of a globally integrated national payment gateway that would make it easier for freelancers and IT exporters to receive international payments efficiently.
According to Batada, Pakistan’s freelancers have generated nearly $1 billion in foreign exchange earnings during the current fiscal year, highlighting the sector’s growing importance to the national economy.
He added that the country’s young and expanding digital workforce represents a significant opportunity for boosting exports, creating jobs, and strengthening Pakistan’s position in the global digital marketplace.
