Islamabad, November 15, 2025 – The Federal Board of Revenue (FBR) has collected an impressive Rs7 billion from the export of services during fiscal year 2024-25, marking a significant 30% increase compared to Rs5.38 billion collected in the previous fiscal year.
FBR officials attributed the surge in tax collection to the rapid growth of Pakistan’s IT and IT-enabled services sector, which continues to drive foreign revenue inflows.
The FBR collects withholding income tax on exports of services as a final tax under Section 154A of the Income Tax Ordinance, 2001. According to the withholding tax rules, a 0.25% tax rate applies to exports of computer software or IT services by entities registered with the Pakistan Software Export Board (PSEB), while other services are taxed at 1% of export proceeds.
Section 154A outlines that authorized dealers in foreign exchange must deduct tax on various export services, including IT services, technical services, royalties, foreign construction contracts, and other Board-notified services. The deducted tax is considered final upon filing of the relevant returns and withholding statements, with no credit allowed for foreign taxes paid.
The FBR, in consultation with the State Bank of Pakistan, determines the payment procedures for this tax and retains the authority to include or exclude specific services under these provisions.
This record collection highlights the strengthening contribution of service exports to Pakistan’s revenue base, reinforcing the country’s position in the global IT and services market.