P@SHA, the Pakistan Software Houses Association, has expressed significant disappointment over the new federal budget for 2025-26, describing it as a major setback for the country’s growing information technology sector. The association brings to light the fact that the budget notably misses two key requirements of the IT industry, a move that may have far-reaching economic consequences.

P@SHA’s official statement cites that the government failed to develop a proper and implementable tax framework for remote IT workers from within the country and overseas. Meanwhile, the budget also fails to provide for the continuation of current tax incentives that are crucial for IT exports. These shortcomings, P@SHA maintains, are harmful for the continued growth of the IT sector.

The association has issued a stark warning that these policy oversights could jeopardize an anticipated $700 million in direct foreign digital investment. This, consequently, threatens to stifle the projected surge in IT exports and could adversely impact thousands of employment opportunities within the IT and software development sectors.

P@SHA emphasizes that the current budget has introduced a pervasive sense of uncertainty that is likely to undermine the global competitiveness of local IT firms. Furthermore, this ambiguity poses a significant threat to the development of emerging segments such as startups and freelancers.

In light of these concerns, P@SHA has made an urgent plea to the government. The association strongly urges forthwith consultation with IT sector stakeholders. Their immediate call is for the government to make changes to the budget as and when necessary, thus enacting a clear-cut, consistent, and facilitative tax policy. Such a policy, P@SHA contends, is important for Pakistan to firmly establish itself in the international IT market and maximally utilize the potential of this strategic export-oriented industry.