Even with a strong increase in IT exports, the industry is expected to miss out on $3.5 billion in potential exports for the current fiscal year 2021-22 due to a variety of factors.
Although policymakers and bureaucrats reported a significant increase in IT exports, the country will miss out on the potential IT exports established by the Ministry of Information Technology and Telecommunications (MoITT) and the sector’s exporters.
IT and IT-Enabled Services (ITeS) exports soared to $2.2 billion in the first ten months of the current fiscal year, and are on track to reach $3 billion by year’s end.
Five significant factors for the loss of valuable foreign cash through IT remittances were noted by IT companies led by the Pakistan Software Houses Association (P@SHA) for IT and ITeS.
While the IT/ITeS industry continues to develop overall, the data suggest that the growth rate trend has slowed this year. The only difference this year (compared to last year) is in the tax structure, which has had an impact on prospective growth.
In 2021, the IT/ITeS industry is expected to expand by 47%. If the current growth rate was maintained, the IT industry would have reached $3.5 billion.
The top five factors that hampered intended expansion are listed below.
- Delayed cash rewards distribution and small incentives
- Tax regime sudden change
- Enablement of Special Technology Zone (STZ)
- Political instability and country perception
- Delay in the imposition of PM package proclaimed in January 2022
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