Speakers at a seminar on 'Boundaries in Cyber World' organised by Policy Research Institute of Market Economy (PRIME) recommended that Pakistan should accede to Information Technology Agreement (ITA) to boost IT exports. They said that Pakistan should accede to the ITA- a plurilateral tariff cutting framework and requires complete elimination of tariffs/duties on the IT products, in the larger interest of people and economy.
The speakers said that IT sector in Pakistan has a lot of potential but there is no IT products manufacturing industry. The IT sector is dependent on the IT services and software export in term of revenue generation, they said. They said that the major reasons due to which Pakistan is not acceding to IT agreement is the Federal Board of Revenue's (FBR) fears of reduction in the revenue collected from IT sector. In 2013, FBR collected Rs 3 billion from customs duty paid on IT equipments and Rs 5.7 billion was attributed to income tax on these items.
Dr Manzoor Ahmad, Pakistan's former ambassador at WTO, said that Pakistan was amongst five countries with highest import taxes on IT products. "Higher taxes on IT products are resulting in GDP growth reduction of 1 to 2 percentage points on yearly basis," he said.
He said that joining the IT Agreement will bring major economic benefits in the country as well as transparency and predictability. "Customs duty loss will be compensated through reduction in smuggling and raising more taxes through higher GDP," he said. Dr Shoaib A. Khan of Pakistan Software House Association (PASHA) said that if Pakistan eliminates the tariff on IT and Telecom products, subsequently trade of IT products would increase manifold, which would bring major economic benefits. The volume and the growth of the sector would also enhance and our internet users' penetration may also increase from 11 percent to 33 percent, he said.
Shaheen Viqar, Deputy Chief WTO Wing, Ministry of Commerce, said that so far 82 countries have acceded to the agreement. The countries singed ITA agreement includes all developed countries as well as several developing countries such as Singapore, Malaysia, India, Indonesia, Jordan, Korea, Kyrgyz Republic, Mauritius, Oman, Panama, Philippines, Thailand and Turkey, she said.
She said that Pakistan has delayed acceding to this agreement for nearly 17 years, and has been at a great disadvantage compared to its competitors in this field. In 2001-2002, Pakistan decided to join the ITA but still no decision has been made, she said.
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