PAFLA Calls for Removal of Tax Burden on Freelancers

Pakistan Freelancers Association (PAFLA) has submitted a budget proposal to the government, calling for the abolition of taxes on freelancers’ income to support Pakistan’s booming freelancing industry and encourage foreign exchange earnings.

The proposal aims to remove the variable tax rate, which currently ranges from 1 per cent for return filers to 2 per cent for non-filers on every income transaction received by freelancers in their bank accounts.

According to Tufail Ahmed Khan, CEO of PAFLA, the majority of freelancers in Pakistan work on various freelancing platforms, where fees are deducted at different rates. Additionally, freelancers also face charges from money transfer services, significantly reducing their overall income.

Recognizing the substantial contribution of freelancers, who generated $400 million in the previous financial year (2021-2022), PAFLA estimates that this year’s figures are likely to match or exceed that amount.

To facilitate freelancers, PAFLA urged the government to direct commercial banks to provide free services, enabling freelancers to maintain their accounts directly in Pakistan. This would eliminate the need for income to be received through indirect channels from different countries.

PAFLA also requested the allocation of dedicated workstations for freelancers at IT parks and Special Technological Zones. These workstations would offer subsidized and fast internet services, as well as opportunities for networking and knowledge exchange with industry professionals.

Furthermore, PAFLA emphasized the importance of more banks introducing forex accounts, which would enable freelancers to have credit facilities for collaborating on major projects with foreign partners.

Additionally, banks should offer special savings accounts tailored to freelancers’ needs, allowing them to maintain a favorable credit history and access services for auto and house financing.

Pakistan’s freelancing industry currently boasts the fourth-largest workforce globally, with approximately 3.5 million freelancers providing services in various fields. By implementing the proposed measures, the government can support these freelancers, promote the growth of the industry, and solidify Pakistan’s position as a leading player in the global freelancing market.