Finance Bill: Govt has failed to incentivize IT, ITeS exports: P@SHA

ISLAMABAD: Muhammad Zohaib Khan, chairman Pakistan Software Houses Association (P@SHA), has apprised that the federal government has failed to incorporate the measures to encourage and incentivize IT exports and exports of IT-enabled Services (ITeS) in the Finance Bill 2023, said a press release.

Muhammad Zohaib Khan highlighted the fact that P@SHA and the Ministry of IT and Telecom (MoITT) reached an agreement with FBR to implement amendments for the IT and ITeS industry in the Income Tax Ordinance (ITO) 2001; Sales Tax Ordinance (STO) 2001 and Sales Tax Act (STA) 1990 through the upcoming legislative opportunity; i.e. Finance Bill 2023.

The understanding was reached with Prime Minister Shehbaz Sharif to insert the aforementioned amendments at the earliest possible opportunity in January 2023 in P@SHA’s detailed presentation and consultative session with him, P@SHA Chief added.

Chairman P@SHA Muhammad Zohaib Khan mentioned that “it is deeply disappointing to see that despite the seriousness shown by the PM and Finance Minister, the amendments are not reflected in the bill.

While the industry is making the effort to achieve the export target given by the PM, the same commitment is not reciprocated from the government institutions.”

He added that “we are not being able to grow YoY IT exports performance.

This is all because of lack of continuity in economic policies; lack of coherence among government institutions and not-incentivizing the IT industry.

Last month, the FBR started issuing notices to the IT companies on super tax that too with very short deadlines. Similarly, SBP announced facility for the IT industry with a timeline till of March 31, 2023. P@SHA has reiterated time and again that the timeline is counterproductive to the spirit and purpose of the facility – and, increasing IT exports of Pakistan through building a conducive digital ecosystem.

It must be stressed that while Pakistan grapples with economic crisis, IT and ITeS is the only industry which can potentially stabilize Pakistan’s economy and bridge the current account deficit (CAD) and trade deficits.

The industry also offers a tangible increase in investments through FDI and JVs. In an environment which lacks support and facilitation for business operations despite assurances by the highest authorities, the export remittances are only going to decrease, let alone being stable or posting growth.

Copyright Business Recorder, 2023