The federal government has rejected a budget proposal of the Federal Board of Revenue (FBR) to withdraw sales tax exemption on computer software. Taking the same stance, the provincial government has not imposed any kind of new tax on computer hardware and software for promotion of the computer sector.
Sources said that FBR had chalked out a revenue generation measure to impose sales tax on computer software, but the proposal was dropped at the highest level. However, increase of 2 to 4 per cent withholding tax at the import stage would also affect the imports of computer vendors' industry.
Meanwhile, Information Technology and Computer software sectors have expressed their deep concern over the federal budget for 2009-10. A leading computer trader told Business Recorder that the government has increased 23 per cent prices of computer parts due to which the computer assembling industry is at stack resulting in unemployment. The government should review its policy regarding IT sector and should give exemption of the taxes. Due to extra taxes, there is a decrease of 32 per cent in overall growth in the IT sector.
They said that on the other hand Punjab government has increased the budget allocation for the financial year 2009-10 by 32 percent in the budget allocation of Rs 1300 million against the revised estimates of Rs 984.822 million of 2008-09 reflected the provincial government's priority to develop the information technology in the province.
They proposed that like the Punjab government the federal government should plan to improve governance and business processes in public sector for greater efficiencies through introduction of information technology and building of related human capacities in the departments. They said that the government should encourage construction of modern Software Technology Park and Internet City.
They said that various strategies should be evolved for the development of information technology that include support local IT industry through investment on Infrastructure Development, Research and Development, Education and Training and Automation of Business Processes in public sector institutions for transparency, management and public convenience.
Despite the fact, the industrial sector has a major role in increasing economic opportunities in the country, creating employment opportunities as well as alleviating poverty, the federal government has totally ignored this field.
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