Tax on freelancers should be abolished: PAFLA

The government should remove the tax on the income of freelancers who are earning precious foreign exchange for the country through working on different projects for foreign clients.

In a budget proposal sent to the government and relevant authorities, the Pakistan Freelancers Association (PAFLA) demanded the government for removing the variable tax rate ranging 1% on return filers to 2% on non-filers against every income transaction received by freelancers in their bank accounts.

CEO PAFLA Tufail Ahmed Khan said a majority of the freelancers in Pakistan work on different platforms of freelancing which also deduct their fees at different rates, on the other hand, various money transfer services also charge an amount from the freelancers, hence all these factors reduce their overall income significantly.

Freelancers fetched an amount of $400 million in the last financial year 2021-22. This year, the freelancers are likely to match this value by the end of the current financial year as per estimates.

The government should direct commercial banks to provide free services to freelancers in the country so that they could directly maintain their accounts in Pakistan’s banks instead of receiving their income through indirect channels from different countries.

PAFLA demanded the government to allocate a dedicated workstation for freelancers at IT parks and Special Technological Zones which will help them avail the subsidize and fast internet services, and opportunities for networking and knowledge exchange with the professionals of their respective fields.

Also, the government should push more banks to introduce forex accounts allowing them a credit facility for doing major projects with foreign partners. Also, banks should offer special saving accounts for freelancers to maintain their credit history and avail services of auto and house financing.

Pakistan is considered as the 4th largest workforce of freelancers in the world. There are nearly 3.5 million freelancers in Pakistan providing services in different fields.