How this works
Both rates are final tax
This is the key thing that makes IT export income so favorably treated: whichever rate applies — 0.25% or 1% — it's a final tax. Your qualifying export income isn't then also subjected to the normal progressive tax slabs on top. This is a genuinely different, much lower-tax regime than salaried or standard business income.
How to qualify for the 0.25% rate
Register with the Pakistan Software Export Board (PSEB) — you'll need an NTN, CNIC, and evidence of IT/ITeS export activity (Upwork/Fiverr history, client invoices, or a Payoneer statement). The registration fee is Rs 1,000 and processing typically takes 5–10 working days. Once registered, your bank applies the 0.25% rate automatically on qualifying inbound remittances instead of the default 1%.
If you don't qualify at all
Income from local Pakistani clients doesn't count as an export, and proceeds kept offshore or received outside official banking channels can disqualify you entirely from both concessional rates. Non-qualifying freelance income instead falls under standard business income tax slabs — a substantially higher effective rate than either 0.25% or 1%.
Assumptions & limits
Assumes all income qualifies as genuine IT/ITeS export proceeds received through proper banking channels. Doesn't model the non-qualifying business-income-slab scenario, deductible business expenses, or the separate Section 154B 5% withholding that applies specifically to social-media platform revenue. Figures are for guidance only, not tax advice.