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PSEB and IT export

PSEB Registration and the 0.25% IT Export Rate

Registering with PSEB cuts the tax on IT and IT-enabled export proceeds from 1% to 0.25%, and the Finance Act 2026 extended that rate to tax year 2029. Registration is a statutory condition written into section 154A itself, not a formality. It costs Rs 1,000 a year for a freelancer. The widely repeated requirement to bring 80% of proceeds through banking channels was repealed in 2022 and does not apply.

We do this for clients:PSEB Registration in Pakistan

Where these figures come from

Statutory basis
Income Tax Ordinance, 2001, as amended by the Finance Act 2026, for tax year 2027 (1 July 2026 to 30 June 2027).
Last checked against the statute
by BarrioVibe, which files income tax returns through FBR IRIS.

These figures are an estimate computed from the rates above, not tax advice for your situation. Your return depends on facts a form cannot see, so treat the number as a starting point and speak to us before you file on it.

Where the rate comes from

Section 154A requires every authorised dealer in foreign exchange to deduct tax when it realises foreign exchange proceeds on certain accounts. The first of those, in clause (a), is exports of computer software or IT services or IT enabled services, and it carries a condition in the statute itself: the exporter must be "registered with and duly certified by the Pakistan Software Export Board".

Division IVA of Part III of the First Schedule then sets two rates. For PSEB-registered exporters of software and IT services, 0.25% of proceeds. In any other case, 1%. PSEB registration is therefore not paperwork that helps your claim, it is the thing that decides which of two rates the bank applies when your money arrives.

Why the myth persists

Because it used to be nearly true. Before 2022, section 154A(1)(a) applied the reduced rate "in case tax credit under section 65F is not available", so the two provisions were linked and a condition sitting in 65F felt like a condition on 154A. The Finance Act 2022 replaced that trigger with the PSEB registration requirement, and the two have been independent ever since.

The same amendment did something else worth knowing: section 65F no longer covers IT exports at all. Only two limbs survive, coal mining projects in Sindh and a startup as defined in section 2(62A) that has been certified by PSEB, for the certification year and the two following. If you read that a 100% tax credit is available on IT export income, that is repealed law.

What PSEB charges

From PSEB's own registration pages. Note that pseb.org.pk now redirects: PSEB operates as Tech Destination, so guides still pointing at the old paths are stale.

RegistrantNew registrationRenewal
FreelancerRs 1,000 per yearRs 2,000 per year
IT company, established within 12 monthsRs 5,000 per yearBy revenue, below
IT company, established over 12 monthsRs 10,000 per yearBy revenue, below
Company renewal, revenue up to Rs 50m-Rs 10,000 per year
Company renewal, Rs 50m to 100m-Rs 15,000 per year
Company renewal, Rs 100m to 300m-Rs 20,000 per year
Company renewal, Rs 300m to 600m-Rs 25,000 per year
Company renewal, above Rs 600m-Rs 30,000 per year

What a freelancer needs

Three documents for a new registration. The first one causes more rejections than the other two.

  • A personal NTN with no business name on it. PSEB is specific about this, and a business NTN will not do.
  • Both sides of your CNIC
  • A personal bank account letter or certificate
  • At renewal, additionally: a summary of export revenue carrying the correct IT or ITeS code from the State Bank, and the previous year's income tax return

What a company needs

More, and the export revenue summary matters as much as the incorporation papers.

  • Business NTN
  • CNICs of all directors, shareholders, partners or the proprietor, and passports for any foreign nationals
  • Memorandum and articles, Form 29 and the incorporation certificate for an SECP entity, or the partnership deed and firm registration certificate for a firm
  • Six months of business bank statements, or a bank account letter
  • A summary of export revenue with the correct State Bank IT or ITeS code
  • A financial statement from audited accounts, or the tax return

Making the 0.25% final rather than an instalment

The deduction under section 154A is a final tax only if three conditions in subsection (2) are met: a return has been filed, withholding tax statements for the year have been filed where required, and sales tax returns under federal or provincial law have been filed where required.

The third condition carries a proviso that matters enormously to freelancers and is mentioned almost nowhere: it does not apply to an exporter falling within clause (a), which is the software and IT services category. So a PSEB-registered IT exporter with no sales tax registration does not lose final tax status for that reason. If you have been told otherwise, that is the answer.

What happens if you export without registering

Nothing dramatic, and this is worth saying plainly because the alternative reading frightens people into paying for advice they do not need. Exporting IT services without PSEB registration is entirely lawful. The consequence is a rate consequence: you fall outside clause (a) and into "any other case", so the bank deducts 1% instead of 0.25%.

For context on how that gap has widened, the Finance Act 2026 raised the export-of-goods rate under section 154 from 1% to 1.25%. A PSEB-registered software exporter now pays a fifth of what an exporter of goods pays, and a quarter of what an unregistered service exporter pays.

What the difference is worth on your numbers

Enter your annual export receipts to see the gap between the registered and unregistered rate, against the Rs 1,000 a year the registration costs.

Freelancer & IT Export

Questions

The questionspeople ask

  • What is the 0.25% tax rate for IT exports in Pakistan?

    Division IVA of Part III of the First Schedule sets 0.25% of proceeds for exports of computer software, IT services or IT enabled services by persons registered with the Pakistan Software Export Board, against 1% in any other case. The Finance Act 2026 extended the 0.25% rate to tax year 2029.

  • Do I need to bring 80% of my export proceeds through banking channels?

    No. That condition was a proviso to section 65F(1)(c), which the Finance Act 2022 omitted. It was never a condition of section 154A. It also makes no structural sense there, because section 154A operates when an authorised dealer realises foreign exchange, so the proceeds are already through a banking channel.

  • How much does PSEB registration cost?

    For a freelancer, Rs 1,000 a year for a new registration and Rs 2,000 a year to renew. For a company, Rs 5,000 if established within the last twelve months or Rs 10,000 otherwise, with renewal banded by revenue from Rs 10,000 up to Rs 30,000 above Rs 600 million.

  • Is PSEB registration mandatory for IT exporters?

    No. Exporting IT services without it is lawful. Registration is the statutory condition in section 154A(1)(a) for the 0.25% rate, so without it your bank deducts 1% instead. It is a rate consequence, not a legality one.

  • Do I need sales tax registration to get final tax status on IT exports?

    No. Section 154A(2)(c) requires sales tax returns to have been filed where required, but its proviso disapplies that condition for exporters within clause (a), which is the software and IT services category. A PSEB-registered IT exporter with no sales tax registration keeps final tax status.

  • Does section 65F still give IT exporters a 100% tax credit?

    No. The IT export limb was clause (c) and the Finance Act 2022 omitted it. Section 65F survives only for coal mining projects in Sindh and for a startup as defined in section 2(62A) certified by PSEB, for the certification year and the two following tax years.

  • What NTN do I need for PSEB registration as a freelancer?

    A personal NTN with no business name attached to it. PSEB states this explicitly and a business NTN will be rejected, which is one of the more common reasons a freelancer registration comes back.

  • What happens if my PSEB registration expires?

    It can be revived, but PSEB charges a surcharge of Rs 5,000 per year on top of the renewal fee for an expired registration. We found no published grace period.

  • Is pseb.org.pk still the right website?

    It redirects. PSEB now operates as Tech Destination, with registration through its portal. Guides still sending you to old pseb.org.pk paths have not been updated.

Also here

Relatedguides

Exporting IT services and want the rate secured?

The 0.25% is conditional on registration and on the filing conditions in section 154A(2), including the withholding statements. We handle both halves.

Talk to us about PSEB