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Tax exemptions for IT industry

Tax exemptions for IT industry

The government has extended tax exemptions for another three years to boost information technology sector in the country. The step is taken at a time when every sector of the economy is under pressure due to various reasons. Pakistan has robust IT industry. Hundreds of thousands of young professionals are engaged in the business and earning billions of dollars foreign exchange annually for the country. But the Pakistani government, educational institutions and software houses could not fully utilize the potentials of the IT industry. According to economists, Pakistan’s software industry is the future of the national economy and new government policies are required to reap its benefits. Pakistan can be a hub of IT industry in few years if the government makes sincere efforts to boost this sector. According to the federal minister for information technology, the tax exemptions are expected to enhance the volume of IT exports, increase employment opportunities and play a significant role in the growth of the industry in the country. The minister also expressed the hope that the government will reduce tax on domestic revenues from July this year and will also waive sales tax on desktops and laptops.

It is good omen that the government is planning to set up an IT park in Islamabad in coordination with Pakistan Software Export Board and in consultation with Korean experts. The feasibility study of the park will soon be finalized and work on the project will be announced. The big, small and individual entrepreneurs are already in the field and are engaged with their western counterparts. Unfortunately, individual efforts are the basis of all the progress made in the IT industry so far. The government share in this sector is negligible, but it can encourage young professionals in many ways and stop brain drain. This industry does not need big infrastructure, but access to fast speed Internet and concessions in the provision of branded laptops and computers. The young professionals mostly work for individuals in developing apps for IPhone and android. However, they face difficulties in getting payments from foreign buyers of their products.

The government has so far failed to allow the establishment of PayPal in Pakistan and reasons have never been specified. Hundreds of thousands of young professionals are facing hardships in receiving their hard-earned money. In some cases, they have to endure deductions of thousands of rupees on ATMs which most of the time show technical faults and deduct Rs 300 on every attempt. The government must make arrangements to ensure easy transaction of money to the IT professionals.