A debate has emerged over Pakistan’s taxation policy for freelancers and remote workers after P@SHA urged the federal government to remove the existing 0.25 percent Final Tax Regime (FTR) on foreign income earned through platforms such as Upwork, Fiverr, and other international marketplaces.
According to reports, P@SHA described the low tax rate as a “loophole,” arguing that the current system should be revised. However, critics strongly disagree with this view, saying the tax policy is not a loophole but an important economic measure designed to encourage foreign exchange inflows into Pakistan.
Supporters of the existing tax regime argue that the 0.25 percent FTR has played a key role in helping Pakistan’s growing freelance and remote work sector expand internationally. They believe the policy encourages freelancers, IT professionals, and digital workers to bring their earnings into the country through official banking channels.
Analysts also point out that Pakistan heavily depends on foreign exchange reserves and remittances to support its economy. In such circumstances, they say, maintaining incentives for freelancers and remote workers is important because the sector continues to contribute valuable foreign income to the country.
Many industry observers have warned that removing the tax advantage could discourage freelancers from routing payments through official systems, potentially affecting foreign exchange inflows and creating uncertainty within Pakistan’s digital economy.
Pakistan’s freelance market has grown rapidly in recent years, with thousands of professionals earning income through global online platforms. Experts believe that policies supporting the sector are essential for strengthening exports, promoting digital services, and improving the country’s economic stability.
