The federal government is reviewing a set of major tax proposals for IT sector employees and freelancers in the upcoming Budget 2026–27, with contrasting directions for different income groups.

One proposal under consideration is to reduce taxes for employees working in IT export companies. At the same time, another proposal suggests increasing the tax rate on freelancers, indicating a possible divergence in how different segments of the digital workforce may be treated.

Officials are also examining options to create a more uniform taxation framework across the IT sector, including salaried professionals and independent freelancers, as part of broader tax harmonization efforts.

However, relief on mobile phone taxation appears unlikely in the upcoming budget. The proposal to reduce Pakistan Telecommunication Authority (PTA) tax on smartphones—from 25 percent to 18 percent—has reportedly been put on hold.

As a result, the current 25 percent PTA tax on high-end mobile phones, including devices priced above $500, is expected to remain in place. Any meaningful reduction in import duties on smartphones is also unlikely at this stage.

Sources suggest that overseas Pakistanis may also not receive additional relief on bringing mobile phones into the country, as the existing tax structure is expected to continue.

Policy discussions are also being influenced by International Monetary Fund (IMF) conditions and the government’s focus on maintaining revenue stability. In addition, authorities are said to be cautious about impacting the domestic mobile assembly industry, which benefits from the current tariff regime.

Local assemblers such as Airlink and LMC are expected to continue operating under the existing protection framework.

Overall, while the IT sector is seeing active tax policy debate, major relief in mobile phone duties appears unlikely, with most proposals still under review ahead of the final budget announcement.