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Business

Web Desk
June 14, 2017
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Concern shown over sales tax on exports of IT enabled services

Concern shown over sales tax on exports of IT enabled services

KARACHI: Pakistan Software Houses Association for IT and ITES (P@SHA) expressed concerns over Sindh government’s plans to continue imposing sales tax on exports of information technology enabled services (commonly known as call centers and BPO services).

In a statement issued here, P@SHA said this treatment is unique to only Sindh where exports and foreign exchange earning businesses are discouraged or asked to move their operations to other provinces/ countries.

This bizarre policy move by the Sindh government has left the industry and experts baffled, commentators remains unclear what the motives behind such a move could be, it said.

The Sindh Government has announced through the Sindh Budget 2017-18 that it plans to continue imposing sales tax on exports of information technology enabled services.

The statement added, no other province has imposed sales tax on exports of services and the Federal government has in fact announced a three year income tax exemption for new Information Technology  & Information Technology Enabled Services companies through the Federal Budget 2017-18 and subsequent Finance Bill 2017.

It added, sales tax being a consumer tax is not to be borne by the service provider and is intended to be paid by the customer. Therefore sales tax application remains a matter for domestic sales and in export scenarios where the customer is not in Pakistan sales tax is not applied across any industry.

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