Long-term certainty for the tech sector

The Federal Budget 2026-27 has extended the reduced 0.25% tax rate for IT and IT-enabled services (ITeS) exporters from 2026 to Tax Year 2029. For a sector that competes globally and plans on multi-year horizons, this extension gives the kind of predictability that supports investment and hiring.

What the 0.25% rate covers

The concessional rate applies to exporters of IT services and IT-enabled services, such as software development, technical support, business process outsourcing, design, data services and similar offerings sold to clients abroad. Instead of a higher general rate, qualifying exporters pay the reduced 0.25% rate on their export earnings.

Why the extension matters

Multi-year planning. Firms can sign long contracts and forecast margins to 2029 with confidence.
Investor signal. A stable, low rate makes Pakistan more attractive for tech investment.
Talent retention. Predictable economics help companies commit to hiring and training.

A simple illustration

Consider an IT exporter earning Rs 100,000,000 in qualifying export revenue.

At the concessional 0.25%, the relevant charge is Rs 250,000.
Compared with a higher general rate, the saving frees significant cash to reinvest in product, people and infrastructure.

The exact figures depend on each company's structure, but the direction is clear: the sector keeps more of what it earns.

Conditions still apply

Concessional treatment comes with compliance expectations: registration, routing proceeds through formal banking channels and accurate reporting. Keep your export documentation and payroll records clean so you can claim the rate without friction. Good housekeeping is what protects the concession.

A growing, formal sector

Extending the rate to 2029 signals confidence in IT exports as a pillar of foreign-exchange earnings. As tech firms scale, their payroll, contractor payments and withholding obligations grow with them. That is where disciplined systems pay off.

How Zaffre supports tech exporters

Zaffre Axon from Zaffre Tech is built by a technology company that understands the IT sector's pace. The Zaffre HRM module auto-applies salary slabs, allowance taxability and EOBI across a growing engineering team, while Zaffretech finance tooling tracks withholding on contractor and vendor invoices. Configured centrally on Zaffreaxon and aligned to current FBR rates, it keeps fast-scaling IT firms compliant so founders can focus on winning export clients, not reconciling spreadsheets.

References: Finance Act 2026 (Federal Budget 2026-27); Income Tax Ordinance 2001; FBR IT and ITeS export concessions.

Book a demo

See how Zaffre Axon keeps a scaling tech team compliant under the extended IT concession. Book a demo with Zaffre Tech.

IT & IT-Enabled Services 0.25% Tax Rate Extended to 2029