Remittances from IT exports reach all-time high 

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Remittances from IT exports reach all-time high 
Remittances from IT exports reach all-time high 

It has been reported that Information and Communication Technology (ICT) export remittances totaled $183 million in May 2021, indicating negative growth of 8%.

As a result, ICT export remittances declined by 26 percent on a month-over-month basis in May 2022 versus $249 million in April 2022.

As Pakistan’s prime minister Shehbaz Sharif noted, the country offers attractive investment opportunities in the technology sector, and the government aims to increase IT exports to $15 billion over the next five years.

To achieve this goal, the premier pledged to facilitate foreign tech companies in all areas, including investments, expansions and close collaboration.

The Federal Minister for ICT and Telecommunications, Syed Aminul Haque, has said that the Federal Board of Revenue’s policies and some rules of the State Bank of Pakistan (SBP) are preventing the growth of the Information Technology (IT) sector in Pakistan and reducing export remittance through freelancers.

Must Read: As of May 2022, Pakistan’s current account deficit totals $1.43bn.

Haque, who presiding over a policy committee meeting and research and development fund meeting, said “there is a concern that local talent may be employed here but operating their own companies from another country, and that country may be receiving all the foreign exchange and credit of IT exports”.

Moreover, Haque stated that the FBR policies were an obstacle to the increase in the number of IT exports, freelancers, and export remittances, for which software companies and freelancers were contemplating shifting their business to other countries. Using our talent in this way would be dangerous, because the benefit and credit would go to another country. We have no reason to expect to get billions of dollars from the IT sector.

The IT industry and freelancers must be given a maximum amount of relaxation including tax enforcement, otherwise, if incentives for IT companies and freelancers are not provided, the industry could shut down sooner rather than later.

Information Technology (IT) exports should approach $5 billion in the next fiscal year, according to sources, but the FBR and SBP have to resolve outstanding issues before this can happen.

The ministry has concerns over matters related to withholding tax and incentives for freelancers.

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