FBR imposes new sales tax on Islamabad-based IT sector

Last Updated: July 5, 2023

0 0 1 minute read

After the IMF deal, we can certainly hope that the government will impose some new taxes. In this regard, the Federal Board of Revenue (FBR) has imposed a sales tax of 15 percent on IT services and IT support services based in Islamabad. The new tax is intended to boost tax collection in the IT sector. FBR plans to streamline tax procedures and ensure that the IT sector contributes an appropriate share to the national treasury.

New sales tax on IT sector

Furthermore, the national tax authority described the scope of IT services and IT-enabled services that pay 15 percent sales tax from July 1.

In this context, the following definitions were given:

(a) “IT services” include a range of activities such as software development, software maintenance, systems integration, web design, web development, web hosting and network design.

(b) “IT Support Services” include but are not limited to inbound or outbound call centers, medical transcription, remote monitoring, graphic design, accounting services, human resources (HR) services, telemedicine centers, data entry operations, cloud computing services, data storage services , locally produced television programs and insurance claims processing.

The new sales tax levy is in line with the evolving landscape of the IT industry and its role in driving economic growth. In addition, it demonstrates the government’s commitment to enforcing fair tax policies in various sectors.

It is also relevant to mention here that IT service providers and IT support services may face legal problems if they fail to comply with the new sales tax. The new sales tax on IT services and IT-supported services is expected to boost Islamabad’s economic development.