Pakistan’s IT Industry Demands Tax-Free Status For Next 10 Years

Leading IT exporter Noman Said has revealed that the private sector wants the authorities to declare the IT industry irrevocably tax-free for a decade. Noman also shed light on the State Bank of Pakistan's data for information technology exports in January 2024, which was alarming as it records a decline of 12.4 percent to $265 million on a month-on-month (MoM) basis as compared to $303 million in December 2023. He said IT is a sector that can help Pakistan improve its socio-economic indicators through stabilizing rupee-dollar parity and reigning in the costlier dollar's multiplier effects on inflationary pressures on the back of swiftly increasing the country's exports. It is pertinent to note that IT is an industry that doesn't require an incubation period of 5 - 10 years as is the case in most of the other export-oriented industries of the country, he added. Noman remarked that we must accept that there are challenges in the IT industry with an open mind; which are hampering the efforts to realize the full potential of IT exports. $300 million a month is a psychological barrier vis-a-vis IT exports and will translate into the attainment of the country's annual IT exports target for the year FY24; i.e. $3.5 billion - and that should precisely be the target for the outgoing fiscal year, he added. He further elaborated on the role and scope of the Special Investment Facilitation Council (SIFC) in attracting investments into the IT industry by clearing red tape and inconsistencies in policies for a few years to come. He articulated the following demands of the private sector for policy interventions on a federal level: Declare the IT industry irrevocably tax-free for a decade - notwithstanding any change in the government MoITT, PSEB, SBP, FBR, and SECP should have facilitative and uniform policies; irrespective of their institutional orientation; to create an enabling environment for the growth of the IT industry in the country MoITT should embark on national-level skills development programs in artifici al intelligence (AI); games development; FinTech; digitalization of governance; blockchain technologies and app development Private-sector representation is a must on special technology zones authority (STZA) and provincial information technology boards to enable them to make policies that can deliver on the ground. Source: Pro Pakistani