A high-level meeting was convened in Islamabad under the chairmanship of Prime Minister Shehbaz Sharif today to promote information technology in the fiscal year 2023-24.
The Prime Minister (PM) issued instructions to finalize the budget proposals for the development of the Information Technology and Telecom (IT&T) sector, the PM Office Media Wing said in a press release.
The PM directed authorities to increase the IT sector revenue to $4.5 billion in FY24 and to prepare a big incentive package for the sector in the upcoming fiscal year budget. He urged for devising a new fixed tax regime for the IT sector and ordered concerned departments to submit recommendations in this regard on an urgent basis.
Concessions for Startups and Businesses
The meeting was briefed on the progress of the IT&T sector. It was informed that the government is taking steps to increase IT sector exports with the new budget. The meeting was told that currently, around 45,000 youths are receiving vocational training in the IT sector who, following the completion of their training, would be self-sufficient in terms of employment and also help generate additional jobs in their respective fields.
The premier decided to give in-principle approval for providing special concessions to businesses and startups in the local IT industry by facilitating access to modern technology and IT-related advancements crucial to the sector.
The prime minister said that the new budget will feature a plan to spend a significant amount of money on vocational training for young people, as well as a proposal to award 100,000 laptops based on merit.
Expansion of PM’s Youth Program, Tax Incentives
The meeting approved a special scheme for expanding the PM’s Youth Skill Development Program and the creation of special IT Training Zones. On another note, officials decided to mandatorily allow IT companies and freelancers the retention of 35 percent of their export proceeds for three years to increase the sector’s efficiency.
The PM said that IT companies operating in Special Technology Zones will receive tax incentives in the upcoming budget. He said subsequent approval of IT-related budget recommendations would help create new employment opportunities in the country.
The premier directed authorities to organize roadshows of the IT sector abroad and to do more research on facilities vital for growth in this sector. He also directed the authorities to take measures to provide special guidance and assistance to the youth for setting up new companies in the IT sector.
Federal Ministers Ishaq Dar, Syed Aminul Haque, Maryam Aurangzeb, Adviser to Prime Minister Ahad Cheema, Minister of State Aisha Ghaus Pasha, Special Assistants Tariq Bajwa, Jahanzeb Khan, Tariq Pasha, Shaza Fatima Khawaja, Senator Afnanullah, Governor State Bank of Pakistan, Chairman Federal Board of Revenue, and other senior officials attended the meeting.
The Chief Executive Officer (CEO) of Systems Limited Asif Peer, CEO of PTCL Hatem Bamatraf, Vice President Jazz Mudassar Hussain, and Deputy CEO Telenor Kamal Ahmed also attended the meeting.
PM All for Incentives, But What About Splashing Some Extra Cash?
It is pertinent to note that IT industry stakeholders met Prime Minister to discuss budgetary proposals in May– with the primary aim of swiftly boosting IT & ITeS exports of Pakistan. The rationale behind the stakeholders’ suggestions to the government was it should earmark upwards of Rs. 13 billion in the Finance Bill for the IT industry.
However, the government wants to cut expenses and has proposed a Rs. 6 billion budget for the Ministry of IT and Telecommunication projects against the demand of Rs. 24.25 billion. The government has also rejected the allocation of funds for 12 new schemes of the IT Ministry and instead allocated a meager Rs. 10 million for one scheme in FY24.