From A PKR 105,500 Monthly Take-Home Gap Between Freelancers And IT Employees, To A 90% Year-Over-Year Surge In Freelancer Earnings. Pakistan’s Digital Economy Is Now The Battleground For Budget 2026-27
According to coverage by ProPakistani, TechJuice and Profit by Pakistan Today, the Pakistan Software Houses Association (P@SHA) submitted Budget 2026-27 recommendations urging the federal government to close a “0.25% tax loophole” used by remote workers registering as freelancers.
The association argues that at a PKR 500,000 monthly salary, a “freelancer” claiming the 0.25% Final Tax Rate under Section 154A takes home PKR 498,750, while a domestic IT employee on the same gross salary keeps only PKR 393,250; a PKR 105,500 monthly gap.
The backlash was immediate. The Pakistan Freelancers Association (PAFLA) warned that any abrupt tax changes would damage a sector that earned close to $900 million in nine months and is on track to cross $1 billion this fiscal year.
Critics including ProPakistani called the framing of the 0.25% rate as a “loophole” a deliberate mischaracterisation, arguing it is a deliberate policy instrument designed to attract foreign exchange.
P@SHA has since retracted the proposal. The structural question remains: does Pakistan tax remote workers like employees, or keep treating dollar inflows as exports? Budget 2026-27 will answer it.
To check out our previous coverage on Pakistan’s IT exports and tax policy, read our articles here.
