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Balochistan Lowers Sales Tax to 3% for IT Exporters

The Balochistan Revenue Authority (BRA) has announced a reduction in the sales tax rate to three percent for exporters of IT and other services based in the province. This measure aims to promote foreign exchange earnings and encourage the use of formal banking channels for transactions.

Under the new policy, service exporters billing clients abroad will benefit from the concessional sales tax rate of three percent. However, this reduced rate applies only if the exporters receive their foreign earnings through recognized banking channels in foreign currency. Payments made informally or outside approved financial practices do not qualify for this benefit.

The BRA clarified that to avail of this tax advantage, exporters must ensure that payments are credited to a registered business account as per the State Bank of Pakistan’s guidelines. This condition links the tax concession explicitly to compliance with regulatory financial transactions.

Additionally, exporters seeking this reduced rate are required to register with the BRA, keep accurate tax records, and submit tax returns within specified deadlines. These compliance requirements are intended to ensure that only legitimate taxpayers who operate via verifiable banking channels can claim the concession.

This new framework forms part of the BRA’s broader strategy to expand the province’s tax base while fostering growth in the services export sector. Officials emphasized that adherence to these rules will enhance transparency in tax collection and contribute to increased revenue generation for Balochistan, a region historically challenged by low tax compliance and informal economic activity.

By incentivizing formal financial transactions and reducing the tax burden on IT exporters, Balochistan aims to strengthen its position in the competitive export market and stimulate economic development within the province.

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