IT and IT services exports surged to $1.948 billion at a growth rate of 29.26 percent during July-March financial year 2021-22, in comparison to $1.5 billion in the same period last year, according to the Economic Survey 2021-22 released on Thursday. These exports include telecommunication, computer, and information services.
During the first nine months of FY22, the government provided 100 percent tax credit on export income from IT and IT-enabled services until 30th June 2025. The sector was also given a 100 percent tax credit on profits and gains derived by the IT startups for the tax year in which a startup is certified by Pakistan Software Export Board (PSEB), and for the next two years.
Other incentives offered to the sector include:
- 100 percent equity ownership allowed to foreign investors, 100 percent repatriation of capital and dividends allowed, and a tax holiday for venture capital funds till 2024; and
- Growth-Driven Financial Incentive on IT & ITeS export remittances: The main purpose of the financial incentive scheme, is to encourage IT & ITeS export remittances through formal banking channels and improve reporting of export remittance receipts in correct IT & ITeS purpose codes, assigned by the State Bank of Pakistan. The government allocated Rs. 4 billion to PSEB for the first-ever financial incentive on IT & ITeS export remittances to be disbursed on the basis of export remittance receipts in FY2021.
The rapid expansion of information technology (IT) is of crucial importance for economic growth because it enables various participants in economic and social life to have quick and easy access to information and knowledge. IT help companies to reduce the cost of information and communication and improve their productivity. It also allows access to new markets and lower capital costs of financial markets. Moreover, the use of IT, in particular, Internet access, can promote entrepreneurial and small and micro-business activities which in turn enhance sustainable economic development.
The Ministry of Information Technology and Telecommunication is taking concrete steps for the adoption of the latest IT tools for the improvement of national IT infrastructure that can be used to raise national productivity and growth.