Govt Proposes RDA 2.0 to Support IT Companies and Freelancers

The Ministry of Information Technology & Telecommunication (MoITT) has proposed a new version of the Roshan Digital Account (RDA)—dubbed “RDA 2.0”—specifically to benefit IT exporters and freelancers. The scheme would provide specialized digital banking infrastructure allowing dollar-based retention, easier remittance of export income, credit facilities using USD balances, and automated verification via a representative body. The proposal, discussed in a high-level working group including FBR, SBP, PSEB, PAFLA, IGNITE, and others, aims to convert informal earnings into formal remittances and bring in up to $1 billion annually in exports. The move addresses long-standing hurdles in forex access, banking inclusion, and regulatory compliance for the digital economy.

• New Initiative: Launch of RDA 2.0 tailored to freelancers and IT export companies

• Account Features: Dollar retention, credit access, card facilities, automated onboarding

• Formalization Goal: Convert unofficial IT income into formal remittance channels

• Stakeholder Support: Input from MoITT, SBP, FBR, PSEB, PAFLA, IGNITE

• Export Potential: Targeting at least $1 billion/year in remittances via formal channels

• Existing Gap: Only ~38,000 of Pakistan’s 2.3 million freelancers hold Pakistani bank accounts

• In FY 2023–24, IT/ITeS services generated over $3.2 billion in export earnings, including $400 million from freelancers in the first nine months

• Despite contributions from over 2 million freelancers, only 38,000 maintain domestic bank accounts. Many use foreign platforms and keep earnings abroad due to banking hurdles.

• Since 2023, the National Freelancing Facilitation Policy has proposed tax exemptions, office space support in STPs, health insurance, interest-free loans, and certification incentives for freelancers.

• Assets like e-Rozgaar centres are being expanded—with plans for 10,000 centres—to provide workspace, connectivity, and training to freelancers.

• Dollar-Based Accounts: Users can retain foreign currency (e.g., USD) earned legitimately from export invoices.

• Automated Verification: A simplified registration process tied to a recognized representative body (e.g., PAFLA).

• Card & Payment Tools: Full access, including virtual debit/credit cards and global payment usage.

• Credit Access: USD balances can be used as collateral for loans or working capital.

• Tax Integration: Linked to FBR for auto-filing of the final tax regime and withholding tax certifications.

This proposal builds on the current RDA infrastructure—extensively used by overseas Pakistanis—and adapts it for digital services professionals within Pakistan.

Substantial IT earnings remain outside formal channels due to banking access issues and limited payment infrastructure. RDA 2.0 aims to bring this revenue into the country and strengthen forex inflows.

With only ~5% of freelancers holding domestic bank accounts, the proposed framework removes onboarding barriers and gives a regulated portal for receiving and keeping export funds.

Features like dollar retention, access to global payment networks, and digital cards empower freelancers to compete internationally—especially in platforms like Upwork and Fiverr.

• Government Bodies: Working group includes MoITT, SBP, FBR, PAFLA, PSEB, and IGNITE under the chair of IT Minister Shaza Fatima.

• Freelancers (PAFLA): Leaders advocate RDA 2.0 as key to simplifying repatriation, ensuring that withholding tax acts as final tax (0.25–1%), and reducing compliance friction.

• Industry Experts: Call for smoother banking access and integration with global platforms like PayPal

• Finalizing Policy Text & Cabinet Approval
  Draft RDA 2.0 policy to be presented to cabinet based on stakeholder consensus.

• Bank & Tech Integration
  SBP to standardize banking procedures, while MoITT integrates digital onboarding and tax compliance mechanisms.

• Pilot Rollout
  Select freelancer hubs and export firms to test the platform before wider deployment.

• Awareness Campaign
  Ensure freelancers are aware of benefits, account setup procedures, and rights under final tax regimes.

• Monitoring & Feedback Loops
  Establish a working group to track adoption, remittance levels, tax compliance, and improve user experience.

The government-proposed RDA 2.0 marks a landmark shift in Pakistan’s digital economy strategy. By tailoring the successful Roshan Digital Account model to IT exporters and freelancers, this scheme aims to convert informal earnings into formal remittance flows, ease financial inclusion, and bolster compliance—all while maintaining flexibility and global competitiveness.