For the first time in history Pakistan’s IT sector achieved the mark of $1 billion
First time in history Pakistan’s IT sector achieved the mark of $1 billion. Pakistan’s IT sector is flourishing day by day and now set a new milestone as for the first in history Pakistan’s IT exports via banking channels crossed the mark of $1 billion.
According to State Bank of Pakistan, the financial year 2017-18 proved a much better year for the exports of IT and IT-related services. This time IT exports increased to $1.067 billion as compared to $939 million recorded in the financial year 2016-17. This shows a growth of 13% marking a double-digit figure.
It is important to mention here that this is the second consecutive time the IT industry achieved an all-time high record. Pakistan also attained the highest value of IT remittances in the preceding financial year 2016-17.
However, the value of IT exports is measured as three times more than the remittances reported by SBP in the outgoing financial year, it means the number crossed the mark of $3 billion on the whole.
The difference of the exports receiving of IT sector is due to the fact the export profits is revealed in different other sectors like financial, automobile, and health sectors.
On the other hand, a good amount of exports earning got by freelancers is placed under the category of overseas remittances, which is reason of misreporting of export numbers.
Another factor is, there are lots of local companies with different sizes which are functioning through Dubai and other countries and their services and products are delivered in Pakistan. The companies and workers transferred the earnings under overseas remittances; therefore the real number of exports is not determined accurately.
A great portion of the revenue comes from software exports and services as Pakistan’s IT industry is mainly “outsourcing industry” where services are offered to companies abroad, according to Chairman [email protected]
A great number of freelancers are drawing nearly $1 billion earnings into their personal accounts in Pakistan. If the central bank can resolve this issue, our real export figures can cross to $2 billion with no trouble, he further said.
Another challenge to IT industry is a visa problem from the USA for Pakistani entrepreneurs. If this issue resolved, it can further boost Pakistan’s exports of IT and IT-ES manifold.
Moreover, high taxation is another major problem for the industry, adding the cost of doing business for freelancers and smaller companies along with poor relieve of doing business.
Despite these challenges, Pakistan’s IT industry is doing well. To add more value in IT export’s section, the government has approved the following incentives in this regard for the IT sector.
- Zero income tax on IT exports till June 2025.
- 5% cash reward on IT exports, similar to rewards for other sectors such as textile, leather and sports.
- 5% Sales tax of on ITeS within the federal areas.
- Setting up Special Economic Zones (SEZ’s) for the tech sector to be defined by the BOI and MoITT.
- Access to financing from commercial banks at preferential rates.