The government is mulling over stopping banks from deducting 1-2 percent tax on IT remittances to encourage the exporters of the IT sector to maintain the momentum of exports in the current financial year.
“In a recent meeting, the Minister for Finance, Shaukat Tarin assured the representatives of the IT sector of the imminent removal of one to two percent bank deduction that had been imposed by the banks on every receipt of the exports income on the account of IT and IT-enabled services since the onset of the financial year 2021-22,” said Chairman P@SHA, Barkan Saeed.
ALSO READ
Telecom Falls Under High Profit Margin Services That Pay Higher Taxes: Finance Ministry
The notification from the tax authority to the banks will clarify the decision of the government in this regard.
Prime Minister (PM) Imran Khan recently chaired a high-level meeting with the export-oriented sectors after Pakistan attained its highest-ever exports earning of $2.3 billion on a monthly basis.
The Ministries of Finance and Commerce will hold meetings with the stakeholders of the exports industries under the special supervision of the PM, and will facilitate them by addressing issues to unleash the maximum export potential of the various sectors, including the IT sector.
The exporters of the IT sector witnessed a deduction of one percent tax on the income of the IT receipts even on the grants and investment money transferred from various countries in their bank accounts. Besides, the non-filer IT exporters are being charged two percent tax on the income transferred from foreign sources.
The Chairman P@SHA, Barkan Saeed, told Propakistani that the deduction of one percent IT tax on the exports earning was surprising for the exporters of the IT and IT-enabled services who were against the promises of tax credits on the account of exemption.
The abrupt deduction of the tax had hurt the sentiments of IT exporters at large and was also discouraging for the foreign and local investors who had made investments in various IT companies in Pakistan.
When contacted, senior FBR officials told Propakiatani that so far no such proposal is under consideration of the Board.
Pakistan’s exports of IT and IT-enabled services have surged over $2 billion for the first time in history with 47 percent year-on-year growth. The staggering growth in IT exports receipts is due to the upsurge of the exports orders from various countries during the last financial year, which has put the sector on the road to growth for the next couple of years.
ALSO READ
Dukan Clocks 100,000 E-Commerce Stores Created by Local Sellers on its App
The stakeholders of the IT sector believe that the penetration of the IT companies is consistently increasing in the exporting countries due to their productivity and specializations in diversified fields. They also praised the incumbent government for prioritizing the IT industry as the priority while addressing their issues and challenges.
The growth in the IT sector for export-oriented products and services has put the sector in expansion mode. This will attract growing IT remittances and will create job opportunities for skilled professionals.
