SRO 2026/234: Updated Tax Rates for IT Services Exports

The Federal Board of Revenue has issued SRO 2026/234, announcing revised tax rates and enhanced incentives for Information Technology and software services exports from Pakistan.

Highlights of SRO 2026/234

This statutory regulatory order provides significant tax relief to IT companies engaged in export of services. The key provisions include:

Reduced Withholding Tax

The withholding tax on IT services exports has been reduced from 1% to 0.25% for registered exporters. This applies to companies registered with the Pakistan Software Export Board (PSEB).

Enhanced Export Incentives

• 100% tax credit on foreign exchange earnings retained in Pakistan
• Exemption from minimum tax regime for IT exporters
• Simplified documentation for export proceeds

Eligibility Criteria

To qualify for these benefits, companies must be registered with PSEB, maintain proper documentation of export contracts, and file returns through the FBR digital system.

The SRO is effective immediately and applies to all export transactions from the date of notification.