In order to facilitate IT exporters, the State Bank of Pakistan (SBP) has relaxed the conditions of maintaining foreign exchange allowing them to retain up to 35% from the export earnings in special currency accounts.
The step was taken to encourage and incentivize the services of the IT sector to increase their export earnings, according to the circular issued by the SBP.
IT exporters can now withhold the amount for payment and expenses related to the advertisement, promotion, marketing brand building of products abroad through third-party agents, or through the company’s own subsidiary or marketing office.
Pakistan’s IT companies can now make investments and acquire shares in various potential companies including their subsidiaries and joint-ventures with foreign companies.
IT companies could utilize the foreign exchange for the payment against the participation of foreign exhibitions and fairs, e-commerce platforms for promotion and marketing of the products.
Under the facility, IT companies can make payments and salaries to foreign consultants and service providers against the services received from foreign countries. They can also make payments for hotel booking and travel expenses in lieu of official visits of the company’s employees.
The decision was taken in light of the feedback received by SBP from various stakeholders of the IT sector, SBP circular added. The government held various rounds with the stakeholders of the government which was added by the special assistant of the government including PM for special meetings.
In this regard, the government has planned to resolve issues of the IT industry targeting to increase the remittances of the sector up to $5 billion in the next three years.