ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday said there is proposal to widen the scope of tax concession to IT services and IT enabled services by allowing 100 percent income tax credit.
A statement said that there is proposal to widen the scope of tax concessions available to income from the export of software, IT services and IT enabled services.
“For this purpose, the exemption is being shifted to tax credit regime. It has been proposed that such income may be provided hundred percent tax credit against tax liability including minimum tax liability on their turnover,” it said.
The FBR while clarifying news reports said that the proposal would enhance the scope of concession to the IT sector contrary to the news circulating in social media.
The revenue body rebuffed that there is any proposal to withdraw exemption available to income from exports of computer software or IT services or IT enabled services.
FBR has clarified that under the current legal dispensation, the exports of computer software, IT Services or IT enabled services is exempt from tax as provided under clause (133) of Part-I of the Second Schedule to the Income Tax Ordinance, 2001.
This exemption is subject to condition that 80 percent of the export earnings are remitted to Pakistan through normal banking channel. However, the persons claiming exemptions are subject to minimum tax on their turnover.