Lawmakers Accuse Textile Firms of Exploiting IT Tax Perks, P@SHA Chairman Rejects Allegations

Lawmakers have raised concerns over alleged misreporting of IT exports, claiming that textile exporters are falsely declaring their shipments as IT services to exploit lower tax rates. The issue was brought up during a Senate Standing Committee on Finance meeting, where Senator Anusha Rahman alleged that some businesses were misusing the 0.25% income tax facility available to IT exporters to evade the 29% tax imposed on goods exports.

She pointed to a sudden surge in IT company registrations, suggesting that it could be artificially inflating official IT export figures. According to her, this raises questions about the 28% increase in IT exports recently reported. The lawmaker called for a thorough investigation to verify the authenticity of the figures and prevent potential misuse of tax incentives.

However, Pakistan Software Houses Association (P@SHA) Chairman, Sajjad Syed, dismissed these concerns, stating that Pakistan’s IT industry is experiencing genuine growth. He clarified that there is no concrete evidence of such misreporting, though the Federal Board of Revenue (FBR) will investigate. “We have no evidence of such a practice, though the FBR will investigate the matter. What we do know is that our IT industry is growing and we stand by the 27% growth figure. This should be a time to celebrate, not doubt our achievements. At LEAP, we saw over 1,000 delegates participate, leading to multi-million dollar deals, which is a great sign for the Pakistani IT industry, he said.”

The former P@SHA chairman Zohaib also shared his opinion on the matter. While talking to a media reporter he said,

“I must say that we need to celebrate the IT industry’s growth. It’s not happened in a day or two rather we have seen this growth trajectory over the past one and a half years.  While I was attending LEAP in Riyadh, I saw hundreds of Pakistani companies attending the event and securing projects, and the same thing happened at GITEX. So, we must say the IT industry has shown steady progress. “

While lawmakers push for stricter monitoring of export reporting, the IT sector remains optimistic, citing consistent industry growth and international recognition as proof of its success.

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