Govt sets up Rs10b fund for IT companies
File
The government has announced major incentives for the IT and telecom sector in a bid to boost overall growth of the economy.
During a meeting on Tuesday, Finance Minister Shaukat Tarin approved Rs10-billion fund to give cash rewards to IT companies against their exports and offered 5% rebate for IT exports.
The finance minister was of the view that IT exports needed to be enhanced and the government will provide all-out assistance to the sector. While, welcoming the decision of the finance minister, Pakistan Software Houses Association (P@SHA) also expressed concerns over the attitude of the Federal Board of Revenue (FBR), accusing the tax collection body for harassing exporters and creating hurdles in the growth of IT sector in the country.
The delegation of P@SHA and the Pakistan Software Export Board (PSEB) held a meeting with the finance minister and apprised him of issues faced by the software houses and IT exporters.
Apart from the rebate, it was decided that 1% of annual remittances by the IT sector would be allocated to PSEB every year to carry out skills development, capacity enhancement of IT companies, branding, marketing, and establishment of software technology parks across Pakistan. Foreign companies were also allowed repatriation of their profits.
PSEB Managing Director Osman Nasir said that the decision will eventually help increase remittances from the IT services up to $3.5 billion in the ongoing fiscal year against $2.1 billion in 2020-21 only because the multinational companies do not bring back all the earnings back to the country.
“There are many expenditures and payments for the companies around the world but due to restrictions they do not remit all amount into Pakistan, now it has been decided that the foreign companies can repatriate their profits to any foreign country,” he added. The finance minister has also agreed that the freelancers will be allowed to open a special dollar account to receive payments for their individual IT exports.
“The industry needs up to 50,000 IT experts annually but we will never grow if freelancers cannot operate in an open environment,” said P@SHA Chairman Barkan Saeed.
Published in The Express Tribune, August 11th, 2021.
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