Pakistan’s IT and IT-enabled Services (ITeS) export remittances experienced a slight decline of one percent during the first 11 months of the current fiscal year 2022-23, amounting to $2.369 billion compared to $2.383 billion in the same period last year. However, there was a significant year-on-year increase of around 28 percent in May 2023, with exports remittances reaching $236 million compared to $184 million in May 2022.
According to Arif Habib Limited, May 2023 marked the highest level of monthly exports since December 2022. On a month-on-month basis, the sector’s export remittances also saw a 24 percent increase compared to $191 million in April 2023.
The overall IT and ITeS export remittances, including telecommunication, computer, and information services, achieved an all-time high of $2.618 billion in the fiscal year 2022, reflecting a growth rate of 47.43 percent compared to $2.108 billion in the fiscal year 2021.
While the Ministry of Information Technology and Telecommunication aimed to achieve an IT exports target of $5 billion by June 2023, it raised concerns about the non-implementation of agreed incentives, inconsistent policies, and unresolved tax and banking issues, which may hinder the sector’s growth and digital vision.
Recently, the National Assembly Standing Committee on Information Technology and Telecommunication highlighted that Pakistan’s documented IT exports stood at $2.5 billion, while the actual exports were over $5 billion, indicating a significant gap.
The stagnation in IT exports and potential contraction have raised concerns within the industry. Experts have emphasized the need for collaboration among institutions such as the Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), Securities and Exchange Commission of Pakistan (SECP), Trade Development Authority of Pakistan (TDAP), and Pakistan Software Export Board (PSEB) to align foreign exchange, taxation, regulations, export, and investment policies with international best practices.
With favorable government policies and a focus on improving ease of doing business parameters, experts believe that Pakistani IT exports, projected to be in the range of $2.5-2.6 billion this year, can reach the psychological milestone of $5 billion within two years. However, addressing the existing challenges and prioritizing business-friendly measures will be crucial in achieving this target and boosting the IT industry’s growth.
