Updated July 2026 5 min read
TL;DR: The 0.25% Final Tax Regime on IT/ITeS export earnings — due to expire 30 June 2026 — has been extended for another 3 years to 30 June 2029, with no rate change. Separately, withholding tax on export proceeds was cut from 2% to 1.25%. PSEB-registered freelancers keep the low rate; unregistered freelancers still pay standard rates. WhatsApp 0324-0400564 to check your registration status.

Pakistan's freelance and IT export community had a real deadline hanging over them heading into Budget 2026-27: the preferential 0.25% Final Tax Regime (FTR) on export earnings was scheduled to expire on 30 June 2026. The budget, presented 12 June 2026, resolved that uncertainty.

The Big One: 0.25% Regime Extended to 2029

Rather than letting the preferential rate lapse and pushing IT/ITeS exporters back to standard income tax rates, the government extended the 0.25% Final Tax Regime for another three years, through 30 June 2029. This is an extension of the existing rate, not a new reduction — but avoiding the expiry was the main ask from the freelance and IT export community going into this budget.

Who Actually Qualifies for 0.25%

This preferential rate applies specifically to freelancers and businesses registered with the Pakistan Software Export Board (PSEB) on their qualifying foreign remittances. Unregistered freelancers — a "significant majority" by some estimates — continue paying closer to the standard 1% withholding on foreign remittance receipts, missing out on the lower rate simply because they haven't registered.

Separate Change: Export Proceeds Withholding Cut

Alongside the FTR extension, withholding tax collected on export proceeds was reduced from 2% to 1.25% — a direct cut that benefits exporters more broadly, not just the IT/ITeS-specific FTR category.

The Real Action Item Here

If you're a freelancer receiving foreign payments via Payoneer, Wise, or direct wire and you're not PSEB-registered, this budget cycle is the moment to fix that — the gap between the 0.25% registered rate and the ~1% unregistered rate is now locked in for three more years, and it compounds on every remittance you receive.

Steps to Get PSEB Registered

Frequently Asked Questions

Do I need to do anything if I’m already PSEB-registered?
No immediate action needed — the 0.25% rate simply continues under the extension through 2029.
What if I’m not PSEB-registered — should I bother now?
Yes, this is the best time — the rate difference is significant and now guaranteed for three more years, so the earlier you register, the more you save.
Does the 2% to 1.25% export proceeds cut apply to freelancers too?
It applies to export proceeds broadly; freelancers under the specific PSEB/IT export FTR are already at the lower 0.25% rate, so this cut is most relevant to other exporters.
Can NTNWaale help me get PSEB registered?
Yes — WhatsApp your freelance/business details and we’ll guide you through PSEB registration alongside your NTN.

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