Karachi June 9 2023: Government of Pakistan is likely to extend reduced rate of 0.25% on export proceeds of software, IT Services and IT enabled services for tax year 2024 up to tax year 2026, according to finance bill 2023-24.
Information Technology has become a crucial facilitator in the development of a knowledge society and knowledge economy, playing a significant role in economic progress, says Ministry of Finance.
The government is actively pursuing the ‘Digital Pakistan Vision’ to promote a digital economy, leading to economic prosperity and empowerment of citizens. It aims to enhance the quality of life and economic wellbeing of people by ensuring affordable, accessible, and high-quality IT services for all.
According to Kearney’s Global Services Location Index (2021), Pakistan ranked second globally as the most financially attractive location for offshore outsourcing of IT and ITeS.
As of March 2023, there are 5,109 registered IT and ITeS companies under the Pakistan Software Export Board (PSEB), representing exporters. During the July-March period of FY2023, IT exports amounted to US$ 1.94 billion, slightly lower than the previous year’s US$ 1.95 billion during the same period. IT exports constitute the largest proportion (35.1 percent) of all services sector exports. In the first three-quarters of FY2023, Pakistani freelancers contributed to foreign exchange earnings through remittances, with IT earning US$ 156.9 million and non-IT earning US$ 112.9 million, totaling US$ 269.8 million.
During the same period, PSEB added seven Special Technology Parks (STPs) to enhance infrastructure facilities across various cities in Pakistan, while IGNITE established eight National Incubation Centers (NICs) in different cities, supporting startups and women entrepreneurs. So far, NICs have successfully incubated over 660 startups out of 1,317 creating more than 126,000 jobs, attracting investments worth Rs 15.43 billion (US$ 74 million) and generating combined revenue of Rs 9.13 billion.
As of March 2023, the total telecom subscriptions in Pakistan, including mobile and fixed lines, reached 197 million, with a teledensity of 83.2 percent. The telecom sector contributed approximately Rs 139 billion (Provisional) to the national exchequer during July-December FY2023. The future economic transformation of Pakistan relies on harnessing the potential of the IT and telecom sectors. To achieve this, key initiatives of the government include the establishment of special technology zones, expansion of broadband and 5G networks, promotion of e-commerce and egovernance platforms, enhancement of cybersecurity and data protection measures, and facilitation of foreign investment and collaboration.
