To enhance ease of doing business and improve exports, the Ministry of Information Technology and Telecommunication has recommended a 10-year tax exemption for freelancers, streamlining account establishment and reducing double taxes on the total telecom sector.
Federal Minister for Information Technology and Telecommunication, Amin-ul-Haque, spoke to a blog website platform after chairing the first meeting of the Committee on IT Exports Growth on Tuesday. He said that various proposals were tabled in the meeting, with the ultimate goal of achieving the $3.5 billion export target by the end of the current fiscal year.
The meeting was also attended by officials from the State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR), the Commerce Ministry, and the Board of Investment. Secretary IT, Dr. Sohail Rajput and managing director Pakistan Software Export Board (PSEB) were also present.
According to the Minister, freelancers are a valuable asset to the country because they help promote exports and create jobs. It was proposed, he said, to assist eliminate double taxes on the telecom sector in some places. He went on to say that it was hurting business and had a detrimental influence on investment in the sector.
According to him, the committee charged the Secretary of Information Technology with convening a meeting with the FBR and SBP to address the tax exemption for freelancers. Tax certification was also discussed, he said, noting that three meetings had previously taken place on the subject.
Pakistan’s IT and telecom services exports have reached their highest level in five months. For the period July-November FY2021-22, ICT export remittances, which include telecommunication, computer, and information services, increased by 37.57 percent to $1.051 billion, up from $764 million in July-November FY 2020-21.
ICT export remittances were $221 million in November 2021, up from $168 million in November 2020, a growth rate of 31.55 percent. Furthermore, export remittances were $26 million greater in October 2021 than the previous month.
For the fiscal year 2021-22, net exports were $797 million, or 75.83 percent of total exports of $1.051 billion. For the same period last year, net exports were $554 million, or 72.51 percent of total exports of $764 million.
The fact that local and global IT companies are delivering a large number of orders to foreign clients in various countries is seen in the sector’s development in export value.
The government’s efforts to boost IT exports are paying off. Despite the constraints of ease of doing business, regulatory impediments, and a dearth of trained human resources, leading IT exporters have intended to increase the sector’s exports.
To read our blog on “After a backlash from telcos, the government is reconsidering tax hikes,” click here.
