According to Federal Secretary for Ministry of Information Technology and Telecommunications (MoITT) Dr. Muhammad Sohail Rajput, the uneven tax regime and the creation of foreign currency accounts are two main policy impediments in fostering information technology (IT) exports.
On Wednesday, the National Assembly Standing Committee on Information Technology and Telecommunications, chaired by Ali Khan Jadoon, discussed the issue of freelancers having major difficulties creating foreign currency accounts. Even politicians, he claims, have a difficult time opening such accounts.
The secretary acknowledged this while stating that the IT and Telecom sectors face two main regulatory issues, namely an uneven tax framework and the opening of foreign currency accounts.
According to him, large amounts of business are being lost as a result of these issues. He also mentioned that bringing capital into and out of the country is a huge challenge.
The committee recommended convening a meeting with officials from the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) to examine the issue and identify solutions.
The members of the committee questioned how India’s IT business is thriving and how these difficulties are being addressed. According to the secretary, India is twenty years ahead of Pakistan in this field, but Pakistan has the potential to catch up. For this reason, India established a cyber-city, technology parks, and free-trade zones.
The secretary informed the committee that most orders were lost and converted to Pakistan during the severe COVID-19 wave in India, resulting in a 47 percent increase in IT industry exports from $1.4 billion in 2019-20 to $2.1 billion in 2020-21.
The committee suggested that actions be taken to alleviate the fear and ambiguity surrounding the opening of foreign currency accounts.
To read our blog on “In H1 of FY22, Pakistani freelancers earned $216.78 million in export revenue,” click here.
