Budget 2024-25: IT sector unhappy with proposals

Pakistan Software Houses Association (P@sha), a major representative body of the IT sector, said none of its budget proposals have been considered by the government.

“None of the demands made by P@sha in budget proposal have been met,” said M. Zohaib Khan, Chairman P@sha.

“On the contrary, the skilled salaried class is now burdened with higher income tax, which could cause brain drain of the talent.”

Pakistan’s salaried group has seen increased tax liability for all persons earning more than Rs50,000 a month in Budget 2024-25.

Tax slabs in Finance Bill 2024 reveal that the highest impact would be on anyone earning equal to or more than Rs6 million a year (Rs500,000 a month). The tax liability for these earners increases by Rs22,500.

Interestingly, the tax increase for salaried persons earning as high as Rs12 million a year (Rs1 million a month) is also Rs22,500.

While the government did not touch the income tax exemption threshold – which still stands at Rs50,000 – liability has increased across all other levels of salaries.

Meanwhile, Zohaib said the allocation of Rs79 billion is primarily for the government projects and IT parks.

“Payroll incentives for IT industry have not been accepted to cater remote worker issues, which is hurting industry growth,” he said.

Meanwhile, the IT professional added that the General Sales Tax on IT hardware has also been increased from 5% to 10%, which will also hurt efforts of digitalisation.

“We will reach out to authorities to seek clarification and ask for necessary amendments that are necessary for Pakistan’s IT to continue on its growth trajectory,” he added.

“The current budget does not show the promise that’s repeatedly made by the government,” he said.