The newly planned budget for 2022–2023 was highly criticised by Pakistan Software Houses Association (P@SHA) for IT and ITeS, which represents over 1,000 member businesses. The planned budget not only abandons but decimates the industry’s potential to meet this aim, notwithstanding the Prime Minister of Pakistan’s bold declarations to achieve $15 billion in IT and IT-enabled services exports.
Badar Khushnood, the P@SHA’s Chairman, claims that
“The currently implemented regressive taxation regime has already proven disastrous to the IT industry’s growth. This year’s targeted exports of $3.5 billion are also not being achieved due to the introduction of an inefficient tax regime. Rather than facilitating the IT industry with more and better incentives to catalyze the existing organic growth, the previously announced one and the only benefit, i.e. ‘tax exemption’ committed till 2025 has been abruptly reneged and revoked. If nothing else, this is a recipe for disaster for a nascent yet fastest growing exports-led sector! In 2021, the IT industry crossed exports of over $2.1 billion. The industry had the unique distinction of being Pakistan’s only export industry with a 75% trade surplus since the key raw material for IT exports is ‘skilled human talent’ which is already available in the country so there is no need for any imports to grow IT services exports. Supporting the livelihoods of 600,000 professionals & freelancers and over 10,000 companies, the IT industry has proven to be the fastest-growing industry in Pakistan. It has demonstrated the potential to address the current account deficit with a strong, self-reliant, and sustainable financial future for Pakistan. In 2022, IT industry is expected to become the 2nd largest export sector crossing all traditional sectors (while 1st position is maintained by the textile industry).”
In response to the sector’s stellar success, a loud and cruel anti-IT budget onslaught has been launched against its continued existence. The future of Pakistan’s IT, ITeS, startups, independent contractors, and e-commerce sector have all been put into doubt.
Instead of ensuring “continuity of policy,” the budget draught has not only caused a wave of uncertainty and disillusionment in the IT sector but has also raised questions about the government’s comprehension and political commitment to supporting the only industry with the potential to resolve Pakistan’s economic crisis in the shortest amount of time with the fewest resources needed.
P@SHA has been collaborating closely with the Pakistan Software Export Board and the Federal Ministry of Information Technology and Telecommunications (MoITT) (PSEB).
Despite the unmatched and laudable support of the Honorable Minister, Mr. Amin-ul-Haq, and his staff at the MoITT, the Finance Ministry’s proposed budget failed to capture the advantages of this model public-private partnership. It’s crucial to emphasize that this budget does not even come close to meeting the demands of the IT sector.
To read our blog on “PSEB and P@SHA launch Pakistan’s first free IT Boot Camp,” click here.