IT Industry Demands Tax free Status Amid decline in exports

Pakistan’s IT exports have been declining in the last few months, which is not a good sign. In this regard, a leading IT exporter in Pakistan, Noman Said, has said that the private sector wants the state authorities to declare the IT industry tax-free for the next 10 years. He said the IT sector can help Pakistan improve its socio-economic indicators through the stabilization of rupee-dollar parity and controlling the inflation caused by the rising value of the dollar by quickly boosting the country’s exports. The rapid growth could be achieved because IT is an industry that doesn’t require an incubation period of 5–10 years, contrary to what we see in other export-oriented industries.

Noman also highlighted the State Bank of Pakistan’s data for IT exports in January 2024, which gave ominous signs as it records a drop of 12.4 percent to $265 million on a month-on-month (MoM) basis as compared to $303 million in December 2023.

Noman said that we must recognize that there are challenges in the IT industry, hampering the efforts to realize the full potential of IT exports. He also explained the role and scope of the Special Investment Facilitation Council (SIFC) in drawing investments into the IT industry by removing red tape and inconsistencies in policies for a few years to come.

He articulated the below-mentioned demands of the private sector for policy interventions on a federal level:

• Declare the IT industry irrevocably tax-free for a decade.
• MoITT, PSEB, SBP, FBR, and SECP should have facilitative and uniform policies; irrespective of their institutional orientation.
• MoITT should launch national-level skills development programs in artificial intelligence (AI); games development; FinTech; digitalization of governance; blockchain technologies and app development.
• Private-sector representation is a must on special technology zones authority (STZA) and provincial information technology boards to enable them to make policies that can deliver on the ground.