Audit Reveals Rs. 39.67 Million Revenue Loss Due to Lapsed IT Company Registrations

The Auditor General of Pakistan has identified a significant revenue loss of Rs. 39.67 million for the Pakistan Software Export Board (PSEB) due to the non-renewal of registrations for thousands of IT companies.

According to the audit report, the PSEB failed to renew memberships of 3,967 out of 7,574 registered IT companies, resulting in a substantial financial shortfall.

According to the audit report, PSEB’s registration policy mandates IT companies, call centers, and freelancers to renew their registrations every one to five years. Renewal fees are structured based on annual revenue, ranging from Rs. 10,000 for entities earning up to Rs. 50 million to Rs. 30,000 for those with revenues exceeding Rs. 600 million. Despite this clear policy, the lapse in renewals reflects a missed opportunity to secure a critical revenue stream.

The audit highlighted that PSEB management lacked a robust marketing strategy and effective renewal policy to ensure compliance with registered companies. The absence of timely monitoring mechanisms exacerbated the issue, leaving a substantial number of companies unregistered beyond their initial validity period. Audit findings suggest that proactive measures could have prevented the revenue loss.

According to the audit report, the matter was raised with PSEB management, but no response was received. A Departmental Accounts Committee (DAC) meeting held on January 23, 2024, discussed the issue, but the minutes were still awaited at the time of the report’s finalization.

Audit recommendations call for an inquiry into the reasons behind the registration lapses and a comprehensive categorization of IT companies, call centers, and freelancers based on their renewal statuses. The report also emphasizes the urgency of calculating renewal charges for each category to recover lost revenue and ensure future compliance.