CM offers tax relief for IT industry

KARACHI:

Sindh Chief Minister Syed Murad Ali Shah has announced relief to the IT industry by reducing the rate of Sindh Sales Tax on IT, software business and call centres from 13 per cent to three per cent without input tax credit. However, large establishments which prefer standard rate with input tax credit, shall have the option of 13 per cent with input tax credit facilities.

He made this announcement while speaking at a seminar organised by Sindh Information Science and Technology Department and Pakistan Software Export Board & P@ASHA on the topic of Ease of Doing Business for IT/ITeS Industry at a local hotel. The seminar was attended, among others, also by Federal Minister for IT, Syed Aminual Haq and CM Special Assistant on IT, Tanzila. The CM said that he would announce the relief to the IT industry in his budget speech tomorrow (Tuesday).

HR building

The CM said that Extensive growth in IT exports have put pressure on the supply of quality HR. "If we don't immediately invest in our HR building then we will lose the growth targets," he said and added that his government is fully aware of supply and demand gap and has planned to initiate multiple skill building programmes in the next financial year.

The programmes the CM announced to initiate include high-end bootcamps for the youth, skill building for teachers and trainers, digital literacy for primary and secondary school students, skill programme for girls and skill and freelancing programmes for differently-abled persons.

Innovation & entrepreneurship

Shah said that digital transformation of Sindh could only become a reality if we employ effective public-private partnership. "In order to re-engineer the existing government processes and introduce innovative citizen services it is imperative to engage our youth, involved in innovative ideas and solutions, into government systems," he said and added, for fulfilling this objective the government of Sindh is focusing on different programmes including promote startup culture through incubators and accelerators, Private Equity (PE) and Venture Capital (VC) funding, startup induction in government operations/services and special incentives for women-owned startups.

E-governance

Talking about E-governance, the CM said that automation of government operations was a fundamental building block for efficient and effective governance.

He added that his government is committed to improve governance through use of technology in its operation.

Shah said that Sindh has already taken initiatives for establishment of Sindh Digital Board, automation of government operations, online government services for citizens and businesses and continuous citizen awareness for opportunities and threats.

Tech for socio-economic uplift

The chief minister said that for a developing country like Pakistan, efficient provision of basic citizen services could not become a reality without the intervention of technology. "The Sindh government wants to leapfrog in use of digital technologies and overcome the existing challenges in provision of basic services to citizens," he said and added that his government has decided to use technology and has planned programmes for technology intervention in focused area of health, agriculture, education, and woman empowerment.

Facilitation of IT exports

It is well understood that the solution to the economic problems faced by Pakistan lies in the growth of our IT exports, the CM said and added the growth in IT exports not only would bring much needed foreign exchange in the country but also bring economic prosperity. Therefore, Shah said his government is committed to facilitating the IT sector by providing fiscal and non-fiscai incentives and projects for enhancing IT export from Sindh and policy interventions and procurement regulations to promote the use of local IT solutions.

ICT infrastructure

Talking about ICT infrastructure, Murad Ali Shah said that Pakistan's IT sector is mainly composed of SMEs. He added the Sindh government realised the low cost IT enabled infrastructure needs of the sector.

The CM said that his government has planned to roll out such infrastructure projects across the province with the help of Pakistan's software export board.

He added that the provincial government is also in the process of adopting Sindh's "cloud first policy".

Giving his government directions in this regard, he said it includes coordinating with the federal government for broadband for all, to develop software and IT Parks and to incentivize cloud services for cloud adoption by the government and economical services to startups and IT companies.

Published in The Express Tribune, June 14^th, 2022.