ISLAMABAD: The information technology industry’s budgetary proposals were completely overlooked, despite repeated assurances given by the government, which has left the industry vulnerable and would continue to face challenges in a highly competitive international landscape.
This was stated by Muhammad Zohaib Khan, chairman Pakistan Software Houses Association (P@SHA) who expressed apprehensions that it is a consultation-less budget.
On the contrary, the salaried class is now burdened with even higher income tax; which will further fuel the brain drain of the skilled workforce from the IT industry of Pakistan. The situation was already alarming vis-à-vis taxes and human resource availability; and, P@SHA has, time and again, duly presented the facts and relevant proposals to the government, he added.
Ali Ihsan, senior vice chairman of P@SHA, lambasted the government that it has signed death warrant of the IT industry through this budget; which has been drafted in a vacuum without keeping the stakeholders on board. The government should have been aware that the last saviour of Pakistan’s economy is IT industry – be it exports, current account management, employment generation or foreign direct investment (FDI).
Khan explained that the IT industry is already facing a dearth of skilled and highly-skilled workforce; catering to various emerging and expanding verticals and niches. The government should have given a special package to the human resource pool to enable IT companies continue with the momentum of double-digit growth in IT exports, he added.
The chairman P@SHA stated that federal budget 2024-25 failed to incorporate P@SHA’s proposals aimed at robust growth of the IT industry. Whereas, allocation of Rs79 billion is primarily for the government’s own projects and IT parks – IT industry as a whole or IT companies have been neglected, he added.
On taxation measures, P@SHA chief emphasized that the burden on IT companies is further compounded by the failure to address the challenges posed by remote worker tax regime. Ironically, instead of removing the anomalies in current tax laws, additional taxes have been levied on imports of equipment and GST on hardware has been counterproductively enhanced from five percent to 10 percent.
Khan stressed that the budget directly contradicts the Ministry of IT and Telecom (MoITT) claims of supporting the industry for investments and exports – vital issues remain unresolved and neglected; which has left the industry vulnerable and it would have to continue to face the challenges in a highly-competitive international landscape.
Khan stated that IT industry seeks clarification and demands necessary amendments in the finance bill to ensure that Pakistan’s IT sector continues on its spectacular growth trajectory. The current budget fails to fulfill the promises repeatedly made by the government. It is a consultation-less budget, he lamented.
Copyright Business Recorder, 2024
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