IT Minister Freelancing Policy to Boost Earnings to $5 Billion Annually
The Ministry of IT and Telecom has submitted a transformative National Freelancing Facilitation Policy [1] to the Federal Cabinet, marking a significant step toward enhancing Pakistan’s position in the global freelance market. This policy, shaped after extensive consultations with various stakeholders, aims to transform the freelancing landscape, boosting exports and foreign exchange earnings.
Expanding Access and Opportunities
The core objective of the new policy is to provide freelancers with enhanced access to international markets, projects, and clients. This goal will be supported by a robust marketing and promotional strategy designed to elevate Pakistan as a top-tier destination for freelance work. Fiscal and non-fiscal incentives are central to this strategy, aiming to increase the number of active freelancers to one million and elevate their average annual earnings to $5,000.
The IT Ministry projects that this increase could potentially inject $5 billion into the national economy through export remittance inflows, solidifying Pakistan’s status as a leading freelancer marketplace.
Key Policy Components
- Freelancer Registry and Portal:
- The policy includes the creation of a dedicated portal for a freelancer registry. This portal will serve as a crucial link between freelancers and both local and international markets and regulatory authorities, facilitating smoother interactions and transactions.
- Digital Banking and Financial Access:
- Emphasis is placed on integrating digital banking and e-payments, providing freelancers with access to essential financial instruments. This includes the availability of low-interest loans specifically tailored for freelancers, helping to ease their financial burdens and foster growth.
- Income Tax Incentives:
- Registered freelancers are set to benefit from an income tax holiday, a significant incentive designed to encourage more individuals to enter and thrive in the freelancing sector.
- Skill Development and Capacity Building:
- The policy underscores the importance of a digital-ready environment, promoting learning and skill development practices. Capacity building and training programs are geared towards enhancing the skillsets of the workforce, ensuring they are competitive on a global scale.
- Inclusivity Initiatives:
- Special programs are aimed at underserved areas, with a particular focus on districts in Southern Balochistan. This ensures that opportunities created by the policy are inclusive and far-reaching, promoting balanced regional development.
Facilitating Financial and Technical Growth
The policy also proposes several support mechanisms to enhance the financial and technical capabilities of freelancers. This includes:
- Freelancer Facilitation Desks: Establishing support desks to assist freelancers with various needs, including visa facilitation and navigating digital banking channels.
- Technology Business Branches: Encouraging banks to open technology business branches in at least six major cities, providing targeted support to the freelancing community.
- Subsidized Loans and Insurance: Collaboration between the Pakistan Software Export Board (PSEB) and other relevant organizations to offer subsidized, collateral-free loans up to Rs. 1 million, as well as health, life, and employee liability insurance through subsidies.
Long-term Tax Exemptions and Financial Retention
A notable feature of the policy is the maintenance of an income tax holiday for registered freelancers until 2030. This long-term tax relief is designed to foster a conducive environment for freelancing. Additionally, the policy aims to streamline inward foreign exchange remittances by using specific codes that are exempt from income tax.
Freelancers will also be enabled to open foreign exchange bank accounts, allowing them to retain over 50 percent of their foreign exchange earnings. The PSEB, in collaboration with the Ministry of Finance and the Federal Board of Revenue, will ensure that these remittances remain tax-exempt until 2030.
Future Outlook
This comprehensive policy represents a bold move by the Ministry of IT and Telecom to revolutionize Pakistan’s freelancing sector. By providing the necessary infrastructure, financial incentives, and skill development programs, the policy aims to create a thriving ecosystem that supports freelancers in achieving substantial economic contributions.
The anticipated approval of this policy by the Federal Cabinet could be a game-changer, positioning Pakistan as a powerhouse in the global freelance market and significantly boosting the country’s economic landscape. The concerted efforts of various stakeholders underline a collective commitment to making freelancing a viable and lucrative career path for millions of Pakistanis.
