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Pakistan’s IT Freelancers Earn $1.16 Billion as Government Extends Tax Relief Until 2029

10/27/2026

Pakistan’s technology freelancers have emerged as a major source of foreign exchange earnings, generating approximately $1.16 billion during fiscal year 2025-26, according to details presented to the Senate by Federal Minister for Information Technology and Telecommunication Shaza Fatima Khawaja.

The minister, in a written response, revealed that export remittances from IT freelancers increased by 49.4% compared with the previous financial year, highlighting the growing contribution of independent technology professionals to Pakistan’s digital economy.

Freelancers accounted for approximately 25.3% of the country’s total IT export remittances of $4.6 billion during FY2025-26.

The government also outlined several tax incentives aimed at supporting IT companies, freelancers, and technology startups. These include an extension of the concessional 0.25% tax rate on eligible IT export earnings until tax year 2029 and a substantial reduction in advance tax on payments made through foreign cards.

The developments underline the increasing importance of freelance technology services as Pakistan looks to strengthen its international competitiveness and encourage more digital exports.

IT Freelancers Contribute Over a Quarter of Pakistan’s Technology Exports

According to the figures shared by the IT minister, export remittances generated by technology freelancers reached approximately $1.16 billion in FY2025-26, compared with around $779 million in FY2024-25.

The increase reflects a significant expansion in foreign exchange earnings from freelancers offering services to international clients.

Pakistan’s overall ICT export remittances, meanwhile, reached approximately $4.6 billion during FY2025-26, up from around $3.81 billion in the previous financial year.

This distinction is important because the reported 49.4% growth relates specifically to IT freelancer remittances, rather than the entire IT export sector.

With freelancers contributing more than one-quarter of total technology export receipts, independent professionals have become an increasingly important part of the country’s digital services economy.

The growth also demonstrates the opportunities available to Pakistani professionals working with overseas businesses, although challenges involving international payments, taxation, and access to financial services remain relevant.

Government Extends Tax Incentives for IT Exporters and Startups

Alongside the export figures, Shaza Fatima Khawaja shared details of the government’s efforts to improve the business environment for technology companies and freelancers.

One of the most important measures is the extension of the 0.25% final tax regime on eligible IT export proceeds until tax year 2029.

The concessional rate applies subject to the relevant legal and registration requirements, including registration with the Pakistan Software Export Board where required.

The extension is intended to provide greater tax certainty to exporters and encourage technology businesses to continue bringing their foreign earnings into Pakistan through formal banking channels.

Another significant measure concerns international payments. The government has reduced advance tax on foreign card payments from 5% to 0.5%, a 90% reduction in the tax rate.

This change is particularly relevant to technology businesses and freelancers who make international payments for software subscriptions, digital tools, cloud infrastructure, and other overseas services.

The minister also highlighted the availability of a 100% tax credit for qualifying startups, subject to applicable conditions.

Additionally, the government’s tax measures include relief from super tax for income up to Rs. 500 million, which the minister said would help encourage investment.

Another facility allows eligible IT exporters and freelancers to retain up to 50% of their foreign export earnings or $5,000 in foreign currency, subject to the applicable banking rules.

The retention facility can help exporters manage legitimate international business expenses without immediately converting all their foreign earnings into Pakistani rupees.

Taken together, these measures reflect an effort to make Pakistan’s technology sector more competitive while supporting the growing number of professionals earning income from international markets.

However, the long-term impact will depend not only on tax incentives but also on simpler banking procedures, consistent implementation and the ability of local technology companies and freelancers to secure higher-value international work.

For Pakistan, the latest figures reinforce an important trend: freelancers are no longer a small component of the technology economy. Their contribution has become substantial enough to influence the country’s overall IT export performance.