COMPLIANCE GUIDE

PSEB Section 154A Export Tax Rate for IT and ITES Exporters

Section 154A of the Income Tax Ordinance lets registered IT and ITES exporters settle their export receipts at a concessional withholding tax rate, and PSEB registration is the gateway to it. Once your firm is PSEB registered, the exporter withholding tax on qualifying IT and ITES export proceeds drops from 1% to 0.25%, a meaningful margin on cross border software and services revenue. This guide explains what Section 154A covers and gives Pakistani founders the exact sequence to register with PSEB and lock in the reduced rate.

Steps to secure the 0.25% Section 154A rate

  • Confirm your revenue qualifies as IT or ITES exports, since Section 154A applies to export proceeds of IT and ITES services
  • Secure a verifiable commercial registered address, because PSEB registration expects a real business premises on record
  • Create your company profile on the PSEB portal and submit incorporation, NTN, and bank account details
  • Attach your PSEB exporter address pack so the premises and lease evidence support your registration
  • Complete PSEB verification and obtain your registration certificate confirming Section 154A eligibility
  • Instruct your bank to apply the 0.25% withholding rate on export inward remittances against your PSEB status

Frequently asked

How much tax does Section 154A actually save?

For qualifying IT and ITES exporters, PSEB registration reduces the exporter withholding tax on export proceeds from 1% to 0.25%. On sizeable cross border billings that difference compounds quickly across a year.

Do I need a physical office to register with PSEB?

You need a verifiable commercial address on record, not necessarily a large leased floor. A PSEB exporter address pack built on a tri party commercial sub lease gives you a real, inspectable premises that supports the registration.

Who applies the reduced rate, PSEB or my bank?

PSEB registration establishes eligibility, and your bank applies the 0.25% withholding on qualifying export inward remittances once your PSEB status is on file. Keeping your registration current is what preserves the concessional rate.

Does the reduced rate cover all my income?

The concessional rate is tied to qualifying IT and ITES export proceeds under Section 154A. Non export or domestic income is treated under the ordinary rules, so it helps to keep export receipts clearly identifiable.