The federal Budget 2025 has introduced several policies that could shape the future of startups in Pakistan. With a strong focus on promoting investment and entrepreneurship, the government aims to support small businesses and innovative ventures but not without new conditions.
One of the key highlights is the continuation of tax relief for registered startups. Companies recognized by the Pakistan Software Export Board (PSEB) will continue to enjoy income tax exemptions, a move that encourages more tech-driven startups to register and grow.
Additionally, the budget proposed a 5% reduction in customs duty on imported hardware and tech equipment, a welcome move for startups working in AI, fintech and IoT.
However, the tightening of regulations around non-filers may affect early-stage businesses. According to new rules, only tax filers will be allowed to invest in mutual funds or stock markets. This could limit funding opportunities for some startups relying on angel investors or private equity from outside the formal tax net.
The budget also focuses on digital infrastructure, with increased funding for tech parks and innovation hubs across major cities. This is expected to benefit incubators and accelerators, giving startups better access to facilities and mentorship.
On the flip side, the increase in withholding tax on profit from government securities might encourage more investment in startups rather than savings offering a potential boost to the funding ecosystem.
