The Federal Government has decided to continue tax incentives for the Information Technology (IT) sector, IT-enabled services, freelancers and digital exporters as part of the Federal Budget 2026–27.
According to the budget documents, the Government has recognised the IT sector, including IT-enabled services, freelancers, software houses and digital exporters, as a strategic national asset.
The concessionary Final Tax Regime (FTR) rate of 0.25% on IT export earnings was due to expire on 30 June 2026. However, on the direction of the Prime Minister, it has been proposed that this incentive be extended for a further three years, until 30 June 2029.
In a separate relief measure, the Government has proposed a significant reduction in the tax rate applied to overseas transactions made using credit and debit cards.
Finance Minister Muhammad Aurangzeb announced that the tax rate on such transactions would be reduced from 5% to 0.5%, easing the financial burden on individuals making international payments.
Addressing the National Assembly during his budget speech, the Finance Minister stated that it was an honour to present the budget before the House.
He expressed appreciation to parliamentary leaders of all political parties and thanked the Prime Minister and other stakeholders for their support during the budget preparation process.
The Minister also highlighted Pakistan’s recent diplomatic, economic and security achievements. He noted that Pakistan’s armed forces had demonstrated their capabilities in responding to external threats and emphasised the importance of a strong defence sector in supporting economic growth.
He further underscored the significance of Pakistan’s strategic partnerships with countries including Saudi Arabia and China.
Discussing economic developments, the Finance Minister stated that rising global tensions had contributed to increases in petroleum prices, placing additional pressure on household budgets. He said the Government had absorbed part of the impact and provided relief amounting to PKR 128 billion on petroleum products. According to the Minister, Pakistan’s economic growth rate has reached 3.7%, reflecting ongoing economic recovery and stabilisation efforts.
