ISLAMABAD: The government will target $5 billion in exports of the information technology (IT) sector for the next fiscal year, which would be subject to the resolution of outstanding issues with the Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP).
This was stated by Federal Minister for IT and Telecommunication Syed Aminul Haque, while talking to Business Recorder exclusively here on Tuesday.
The ministries of Finance and Information Technology and Telecommunication are scheduled to fine-tune the budget proposals including reduction in withholding tax and incentives for freelancers on Wednesday (June 1).
The minister further said that the ministry would set exports target of $5 billion for the next fiscal year 2022-23.
The minister said that to promote IT sector and enhance exports, the government will prioritize three areas including branding, HR and marketing in the next fiscal year.
A meeting with Finance Minister Miftah Ismail is scheduled for Wednesday (today) where budget proposals including duties and taxes exemption for the establishment of Cloud Infrastructure, five percent of annual IT export value to be given to the Pakistan Software Export Board (PSEB) for export promotion, removal of the telecom sector from the State Bank of Pakistan (SBP)’s 7 April 2022 regulation of 100 percent LC margin, reduction of sales tax to zero on laptops and IT equipment, rationalization of Advance Income Tax (AIT) on telecom services to eight percent and rationalization and harmonization of the federal and provincial services tax rates on telecom services to facilitate the IT sector, the sources revealed.
The minister said that they had reduced the withholding tax from 15 percent to eight percent and was to further bring it down but the previous government withdrew the decision later. He said that they would try to bring it down to facilitate the sector.
The exports remittances including telecommunication, computer, and information services during the first 10 months (July-April) of the current fiscal year 2021-22 have surged to an all-time high of $2.198 billion growing by 29 percent in comparison to $1.7 billion during the same period in 2020-21.
Haque chaired the 51st Board of Directors meeting of the Pakistan Software Export Board (PSEB) Tuesday.
The meeting discussed matters related to the IT exports and financial incentives disbursement to IT and ITeS exporters.
Additional Secretary (Incharge) Ministry of IT Mohsin Mushtaq was also present in the meeting.
Chairman Pakistan Software Houses Association (P@SHA) Badar Khushnood joined the meeting through a video link. The meeting also discussed issues faced by IT companies and freelancers.
Addressing the meeting, Federal Minister for IT Syed Aminul Haque gave direction for expediting the process of giving cash rewards to the IT companies and setting a timeline in this regard.
Appreciating the Skills Programmes of the PSEB, he directed the management of the PSEB to increase the ratio of women in these programs as the empowerment of women is an important motto of the Ministry of IT and Telecom.
Managing Director PSEB Osman Nasir briefed the chair about Skills Programs including IT Industry Boot Camp Programme, IT Industry-Academia Bridge Programme and Soft Skills Development Programme.
The meeting also approved establishing Sales Launch Pad at the Embassy of Pakistan in Riyadh, Saudi Arabia.
Minutes of the 50th BoD meeting of the PSEB were also approved in the meeting.
Copyright Business Recorder, 2022
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