ITeS export remittances: There has been a lot of soul-searching about decline

ISLAMABAD: The Ministry of Information Technology and Telecommunication has warned the government that on account of the non-implementation of agreed incentives, lack of consistency in policies as well as the without resolving the tax and banks-related issues, the telecom sector exports remittances may further decline besides compromising its digital vision.

Official sources revealed that the latest decline in the ITeS exports remittances rung the alarm bill and serious reservations were expressed among the concerned quarters. The ITeS exports declined by 0.3 percent during the first quarter of the current fiscal year 2022-23 and remained $ 633 million compared to $ 635 million during the same period of the last fiscal year.

The State Bank of Pakistan (SBP) data shows that the ITeS exports remittances declined by around 10 percent on a month-on-month (MoM) basis in September 2022 and remained $ 206 million compared to $ 228 million in August 2022.

On a year-on-year (YoY) basis, the sector exports remittances decreased by over four percent compared to $ 215 million in September 2021.

The official further stated that Federal Minister for Finance and Revenue Senator Mohammad Ishaq Dar on Saturday chaired the meeting of the Prime Minister’s Task Force on Information Technology (IT) and Telecom at the Finance Division, where serious reservations were expressed in the exports remittances decline.

The meeting discussed the issues related to the IT sector’s declining export and measures to bring it back to a growth trajectory.

The chair considering the proposals of the Ministry of IT&T, directed to the concerned authorities to take steps for the facilitation of the IT sector and to remove bottlenecks in order to encourage its exports.

In-light of the directions of the prime minister, a meeting was convened between the SBP and the Federal Board of Revenue (FBR) representatives and the MOIT/PSEB, PASHA teams under the chairmanship of SAPM for Youth Affairs Sheza Khawaja, here on Monday.

The MoITT sources said that the meeting discussed issues of the IT/ITeS sector regarding the FBR and the SBP at length on Monday with the positive outcome on both tax and banking regimes for the sector. The FBR was forthcoming to resolve issues of the ICT sector with assurance to ensure resolution of issues being faced by IT companies and freelancers including policy and operational matters.

The FBR noted down and deliberated on the issues identified by the sector and assured their early resolution after internal deliberation. Further, the SBP assured the early resolution of 35 percent USD amount retention in FCY accounts and its repatriation by IT/ITES companies.

A meeting was immediately been setup between the SBP, MoITT, PASHA, and commercial banks to address operational issues being faced by the IT sector at commercial banks for availing above facility.

Sources said that the meeting was informed that the MoITT has been pursuing with different government agencies for facilitating the IT and Telecom sector.

The Federal Minister for IT and Telecom, Aminul Haque, has raised the issues being faced by the sector in different meetings including the one held with the prime minister in the chair. Haque has said that the sector may face further decline if immediate attention were not paid. The minister has also stressed resolving the outstanding issues of taxation as well as related banks.

Copyright Business Recorder, 2022