Laptops and IT hardware are likely to be exempt from sales tax.

ByShehryar Makhdoom | Published date: | Modified date:

According to credible sources, the government is considering a proposal to abolish the sales tax on laptop computers and other information technology (IT) equipment in the Finance Bill 2022-23. The government is considering, among other propositions, the exemption of customs and taxes on the development of cloud infrastructure and the reduction of the Advance Income Tax (AIT) on telecommunications services to eight percent.

The IT and Telecommunications Department put forward the following ideas to help the IT industry.

  • Cloud infrastructure should not have to pay any duties or taxes when set up.
  • The Pakistan Software Export Board (PSEB) will get 5% of the value of all IT exports each year to help promote exports.
  • The telecom industry will no longer be subject to the State Bank of Pakistan's (SBP) rule of a 100 percent LC margin beginning on April 7, 2022.
  • Laptops and other forms of IT hardware will no longer be subject to any form of sales tax.
  • Recently implemented a reduction of the Advance Income Tax (AIT) on telecommunications services to 8%.
  • Harmonization and rationalization of the rates of the federal and provincial sales taxes that apply to telecommunications services.

After conducting the appropriate research and consulting with the relevant parties, Prime Minister Shehbaz Sharif has requested that the Information Technology and Telecom Department present a strategy for increasing IT and telecom exports to $15 billion over the next two years.