Monday, September 25, 2023

Rs10 billion fund approved for the IT industry: Tarin

Shaukat Tarin, Minister of Finance, sanctioned the formation of an Rs10 billion fund on Tuesday to provide monetary incentives to IT businesses for exports. The government will also provide a 5% tax break on IT exports.

The finance minister acknowledged the need to boost IT exports at a meeting with the association of software firms. He promised the sector that the government will give the necessary facilities.

The Pakistan Software Houses Association (P@SHA) welcomed the finance minister’s move but voiced worry about the Federal Board of Revenue’s (FBR) attitude, accusing the tax-collecting agency of persecuting exporters and impeding the expansion of the country’s IT industry.

The team from P@SHA and the Pakistan Software Export Board (PSEB) met with the finance minister and briefed him on the challenges confronting software companies and IT exports.

P@SHA chairman Barkan Saeed and PSEB managing director Osman Nasir headed the trip.

The meeting was informed that a 5% rebate on exports would be provided, while 1% of annual remittances from the IT sector would be allocated to PSEB each year to carry out skills development, capacity enhancement of IT companies,marketing, branding, and the establishment of software technology parks across Pakistan.

It has been determined that foreign corporations will be permitted to repatriate their earnings.

Mr. Nasir told that the move will eventually assist raise remittances from IT services to $3.5 billion in the current fiscal year, up from $2.1 billion in 2020-21, because international corporations do not send back all of their revenues.

“Many expenditures and payments are made by corporations all over the world, but owing to constraints, they do not submit the whole amount to Pakistan. “It has now been agreed that international firms can repatriate their earnings to any foreign country,” he continued.

The finance minister has also agreed to enable “freelancers” to create a separate dollar account to collect compensation for their particular IT exports.

“The sector needs up to 50,000 IT specialists each year, but we can never develop if freelancers cannot work in an open environment,” Mr. Saeed added.

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