The inside story of the meeting of IT industry representatives with Finance Minister Ishaq Dar has come out.
Sources told ProPakistani that Pakistan Software Houses Association’s representatives have demanded that Federal Finance Minister Ishaq Dar restore the tax exemption till 2025 and continuity of policies regarding the IT sector. The delegation has also demanded payment of the 5 percent cash reward amount announced by the previous government.
According to sources, the delegation chaired by former Chairman PASHA met Federal Minister Ishaq Dar on Tuesday and informed him about the problems faced by the IT industry.
The delegation strongly criticized the policies of FBR and State Bank in the meeting. The delegation also demanded from the Federal Minister to provide funds to local IT companies for product development and give space to local companies in the Special Technology Zone.
According to sources, the delegation told the federal minister that the previous government announced tax exemption for the IT sector, but when the government changed, the FBR introduced a 0.25 percent tax under the FTR system, due to which the government collected nearly $7 million in revenue in 7 months.
The delegation told the finance minister that the growth of the IT sector stagnated due to this system, and IT growth was reduced by 500 million dollars in the last 7 months.
Syed Ahmed Ex-Chairman of PASHA, while talking to ProPakistani said the Federal Minister was told that the IT sector is suffering irreparable damage due to FBR’s policies. IT exports were targeted to reach $3.1 billion by December this year but they are less than $3 billion. He said that if the tax exemption on the IT sector had been continued, the government could have received $25 million in revenue in terms of payroll and other taxes in the last 7 months.
Syed Ahmed said that Federal Minister Ishaq Dar has accepted the demand of industry to allocate land to local IT companies in Special Technology Zones and he directed the authorities to devise a policy in this regard. The federal minister assured the industry representatives that the land will be awarded to local companies on a short-term lease.
The companies also demanded the implementation of the policy of retaining 35 percent dollars in IT exports, which was accepted by the federal minister, he further added.
With exemption on IT export services tax and actual dollar i can bet govt will generate handsome inflow in terms of remittance. Registering in Pakistan software board was a childish approach and waste of public money. Most of the IT personal stop bringing the earning back to Pakistan due to artificial dollar rate of 225 when hundi hawala is giving 248.
Fully agreed, registering with a bureaucracy riddled PSEB was a pain for me. They asked too many irrelevant question, why honestly they have no reason to ask, and the dollar holding at 225 is insane, why should I loose money because most of the people in Pakistan are incompetent and would buy property and use imported items, but have no sense that we need to increase our export competitiveness in all the fields.
On the PSEB, they kept refusing my request to register, saying that I had a company on my NTN (which I use locally, and file taxes for), and all my freelance work done is done on individual basis, and remittance comes to my personal account. they wanted me to delete my 12 year old profile and start freelancing using the company name, the stupidest logic. A freelancer is an entrepreneur by common logic, they want a person to do only one type of business at a time. Anyways, I did end up registering with PSEB by closing the company (and losing a source of income / actually paying less taxes to GOP now, since freelancing is 0.25% tax). Talk about incompetence.