FBR Scrutiny of Exporters: What IT Companies and Freelancers Need to Know

The Federal Board of Revenue (FBR) has initiated a detailed review of tax records for over 480 exporters, a move that is now drawing attention within the IT and IT-enabled services sector, including software houses and freelancers.

The directive, circulated to Inland Revenue field offices at the end of December, targets exporters whose taxable income fell significantly in Tax Year 2025. The scrutiny follows amendments introduced through the Finance Act 2024, which altered the taxation framework for export receipts by shifting them from a final tax regime to a minimum tax structure under Section 154 of the Income Tax Ordinance, 2001.

According to tax authorities, internal data analysis revealed unusual income trends after the legislative change. As a result, tax offices have been instructed to identify abnormal variations, inconsistencies, or unexplained reductions in declared income, particularly among high-value exporters.

Where income declines are not supported by valid commercial or legal grounds, the FBR may initiate proceedings under relevant provisions of the law, including audits, reassessment of completed cases, and on-site verification.

This development has caused unease among IT exporters and freelancers, who are already navigating tight margins, foreign exchange fluctuations, and delays in tax refunds. Industry observers warn that increased enforcement without clear guidance may create compliance uncertainty and disrupt the growth momentum of Pakistan’s digital export sector.

At a time when the government is publicly promoting export-led growth and digital services as key drivers of economic recovery, stakeholders believe that policy consistency and clarity are essential to maintain investor confidence and support the long-term expansion of IT exports.