ISLAMABAD: The Federal Board of Revenue (FBR) has imposed a 15 percent sales tax on IT services and IT-enabled services that are based in Islamabad. The new tax is aimed at boosting tax revenue collection in the IT sector. FBR intends to streamline taxation procedures and make sure that the IT sector contributes its appropriate share to the national exchequer.
New Sales Tax on IT Sector
Furthermore, the national tax body described the scope of IT servies and IT-enabled services that will be paying the 15 percent sales tax from the 1st of July.
In this regard, the following definitions were provided:
(a) “IT services” encompass a range of activities such as software development, software maintenance, system integration, web design, web development, web hosting, and network design.
(b) “IT-enabled services” include but are not limited to inbound or outbound call centers, medical transcription, remote monitoring, graphics design, accounting services, human resources (HR) services, telemedicine centers, data entry operations, cloud computing services, data storage services, locally produced television programs, and insurance claims processing.
The new imposition of sales tax is in line with the evolving landscape of the IT industry and its role in pushing economic growth. In addition to that, it shows the government’s devotion to imposing fair taxation policies across various sectors.
Also, it is pertinent to mention here that IT service providers and IT-enabled services can face legal hiccups if they fail to comply with the new sales tax. The new sales tax on IT services and IT-enabled services is anticipated to boost the economic development of Islamabad.
