The Ministry of Finance and Ministry of Information Technology and Telecommunication are scheduled to fine-tune the budget proposals including a reduction in withholding tax and incentives for freelancers on Wednesday.
This was confirmed by senior officials while talking to ProPakistani. The government is insisting to set a $5 billion export target for Information Technology (IT) sector for the fiscal year 2022-23, but the IT Ministry wants incentives to facilitate and promote the sector and achieve this target.
The exports remittances including telecommunication, computer, and information services during the first ten months (July-April) of the current fiscal year 2021-22 have surged to an all-time high of $2.198 billion growing by 29 percent in comparison to $1.7 billion during the same period in 2020-21.
The IT Ministry will raise the outstanding issues with the Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) regarding the IT sector and would propose a way forward for its earlier resolution to ensure the export target.
Sources further said that budget proposals including duties and taxes exemption for the establishment of cloud Infrastructure, 5 percent of annual IT export value to be given to the Pakistan Software Export Board (PSEB) for export promotion, removal of the telecom sector from the State Bank of Pakistan’s (SBP) April 7, 2022, regulation of 100 percent LC margin, reduction of sales tax to zero on laptops and IT equipment, rationalization of Advance Income Tax (AIT) on telecom services to 8 percent and rationalization and harmonization of Federal and Provincial Services Tax rates on telecom services to facilitate the IT sector are likely to be part of the agenda.
