Export of Services of IT and IT
Enabled
A special regime u/s 154A for
export of IT and IT enabled services was introduced though Finance Act, 2021
whereby 1% final tax was collected on realization of export proceeds of these
services.
Moreover, hundred 8 percent tax
credit was available against this final tax to the exporters of IT and IT
enabled services u/s 65F upon fulfilling few conditions mentioned therein.
In order to simplify the tax
regime for exporters of IT and IT enabled services, the 100% tax credit regime
under section 65F has been withdrawn and a reduced rate of final tax of 0.25%
has been provided for exporters of IT and IT enabled services who are
registered with the Pakistan Software Export Board (PSEB).
Corresponding changes in section
65F have been made accordingly.
Furthermore, scope of definitions
of IT services and IT enabled services contained in clause (30AD) and clause
(30AE) of section 2 of the Ordinance has been clarified and widened through the
Finance Act, 2022.
Previously, the amount of foreign
commission due to an indenting commission agent was charged to tax, at the rate
of 5%, under sub-section (2) of section 154 of the Ordinance.
Now, this rate has been reduced
to 1% by incorporating clause (da) in sub-section (1) of section 154A of the
Ordinance. Corresponding changes have been made in section 154 accordingly.
Moreover, provisions of Tenth Schedule will not apply on tax collectible under section 154A of the Ordinance. Necessary change has been incorporated in rule 10 of Tenth Schedule in this regard.
