Tax Benefits for Women Entrepreneurs in Pakistan

Tax benefits for women entrepreneurs in Pakistan: A step towards economic independence

Tax Benefits for Women Entrepreneurs in Pakistan

The role of women in the development of any country is essential. As Pakistan’s economy grows, employment opportunities and social change increase, and women entrepreneurs are becoming more important sources of growth, employment, and change. Women are also exempt from taxes in other countries besides Pakistan. To facilitate, encourage, and support women in their business endeavors, the Pakistani government has introduced various tax incentives and policy measures. So that women can contribute to the nation’s development in a better way.

Lower tax rates for women entrepreneurs

Tax Benefits for Women Entrepreneurs in Pakistan

The Government of Pakistan has introduced significant tax incentives for women-owned businesses. Businesses earning income from taxable business activities can deduct up to 25% of their income as “Income from Business”.

Such small and medium enterprises (SMEs) run by women have been given specific tax incentives. Under the Tax Laws (Second Amendment Ordinance 2021):

Tax Benefits for Women Entrepreneurs in Pakistan

Women individual business owners are required to pay a relatively lower income tax.

A simplified tax system for SMEs, which includes:

Tax payable on turnover of 0.25% to 0.5%, in addition

All these incentives are available if the annual turnover is between Rs. 1 lakh and Rs. 25 crore.

State Bank’s special schemes for women entrepreneurs

Tax Benefits for Women Entrepreneurs in Pakistan

The State Bank of Pakistan has also introduced several financial schemes for women entrepreneurs, through which it is possible to start and grow a business.

Under the Refinance and Credit Guarantee Scheme, loans of up to Rs. 5 lakh are also available to women entrepreneurs at a markup of only 5%.

Under these schemes, sometimes there is a significant exemption in withholding tax.

Relaxation in registration fees and sales tax

Tax Benefits for Women Entrepreneurs in Pakistan

Several provinces offer partial or full exemptions from registration fees for women entrepreneurs, such as:

Women entrepreneurs in Punjab and Sindh enjoy reduced sales tax on services.

Women entrepreneurs in special economic zones or technology parks may receive additional partial or full tax exemptions.

Tax relief for IT and freelance women

Tax Benefits for Women Entrepreneurs in Pakistan

Women in Pakistan involved in the digital economy, such as freelancing, e-commerce, or software services, can enjoy the following benefits:

Income tax exemption on IT exports.

If a business owned by a women-owned startup is registered with the Pakistan Software Export Board (PSEB) or SECP and 60% of the shares are in the name of women, additional tax credits can also be obtained.

Legal and structural support

Although direct taxes are not beneficial in Pakistan, various government schemes, such as subsidies, exemption from customs duty on imported machinery, and grants, help women become financially independent and succeed in business. These grants are generally not considered taxable income.

FBR Tax Facilitation Centers for Women

The Federal Board of Revenue (FBR) has set up special tax facilitation centres for women entrepreneurs in major cities, where they can:

Get assistance in NTN registration and filing returns.

Get complete information on available incentives.

Get guidance and assistance in claiming refunds.

Conclusion

Tax incentives for business owners in Pakistan are a positive and encouraging step. These incentives not only reduce the financial burden but also give women the freedom and success to do business with confidence. In the future, the government must make these facilities simpler and comprehensive, increase tax awareness, and formulate more policies keeping in mind the need.

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