IT Industry Demands Tax Exemptions until 2025

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IT Industry Demands Tax Exemptions until 2025
IT Industry Demands Tax Exemptions until 2025

What happened at the meeting between IT industry representatives and Finance Minister Ishaq Dar has been revealed.

According to sources, the Pakistan Software Houses Association has requested that Federal Finance Minister Ishaq Dar restore the tax exemption until 2025 and continue policies regarding the IT sector. The delegation has also demanded payment of the 5 percent cash reward amount announced by the previous administration.

In a meeting on Tuesday, the delegation led by former PASHA Chairman Ishaq Dar informed him of the difficulties faced by the IT industry.

The delegation in the meeting strongly criticized the state Bank and FBR’s policies. It also requested funds for local IT companies to develop products and space in the Special Technology Zone for local companies.

A delegation from the previous government told the federal minister that the IT sector was exempt from taxes under the previous government. Still, after the government changed, the FBR introduced a 0.25 percent tax under the FTR system, resulting in nearly $7 million in revenue being collected over the past seven months.

READ MORE: Pakistan’s 3G/4G users reach 121 million

Due to this system, the delegation told the finance minister, the IT sector’s growth has stagnated, which has resulted in a 500 million dollar reduction in growth over the past seven months.

In an interview, former PASHA chairman Syed Ahmed said that the FBR’s policies had damaged the IT sector irreparably. IT exports were expected to reach $3.1 billion by December, but they fell short. It is estimated that the government could have received $25 million in payroll and other taxes in the last seven months if the IT sector tax exemption had been continued.

Regulatory authorities have been directed to devise a policy on allocating land to local IT companies in Special Technology Zones after Federal Minister Ishaq Dar accepted the industry’s demand. In a meeting with industry representatives, the federal minister assured them the land would be leased to local companies for a short period.

According to him, the companies also requested the federal minister implement the policy of retaining 35 percent of dollars from IT exports.

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