Islamabad: 22 February 2022
“Tech-savvy youth and Information Technology sector are Pakistan’s biggest assets that can be exploited to bridge the huge current account deficit,” said Prime Minister Imran Khan while chairing a meeting to follow up on his foreign visits and IT sector initiatives introduced by the Government.
“We are announcing a tax holiday and 100% Forex retention for IT/ITeS Companies and freelancers registered with Pakistan Software Export Bureau (PSEB) to incentivise investment in IT sector for economic turnaround,” he added.
The Prime Minister emphasised the necessity of releasing the IT industry by providing them with ease of doing business and the finest incentives available internationally, as part of his aim to increase IT exports to $50 billion in the next several years. He unveiled a major reform package aimed at boosting the IT sector’s growth.
The Prime Minister announced the formation of the Pakistan Technology Startup Fund, which would give seed capital worth Rs. 1 billion to around 50 startups each year.
In the first phase, the Prime Minister urged the appropriate authorities to develop Special Technology Zones (STZs) on a fast track basis in Islamabad and other provincial capitals to create centers of IT/Technology innovation and investment in cities. Will be designated as Special Technology Zones, allowing IT companies and freelancers to take advantage of the privileges provided by the Authority for Special Technology Zones (STZA).
He also told them to make the necessary modifications to the country’s foreign exchange and income tax rules to assist IT startups grow. These reforms include the State Bank of Pakistan’s launch of Roshan Digital IT Accounts (RIDA), which allows freelancers and IT firms to keep 100% of their foreign income in foreign currency with no restrictions on forex movement; the Federal Board of Revenue’s resolution of double taxation of the IT sector; and the exemption from Capital Gains Tax of venture capital into startups. The Prime Minister has mandated that local and international venture capital funds be channelled to IT startups (global $643 billion in 2021) in order to create jobs and bring in foreign currency.
The Prime Minister was previously informed that ICT export remittances in FY 2020-2021 remained USD 2.1 billion, up from USD 1 billion in 2018, and Pakistan exports to more than 120 countries.
Finance Minister Shaukat Fayyaz Tarin, Information Technology Minister Syed Amin ul Haque, NSA Dr Moeed Yusuf, SAPM on CPEC Affairs Khalid Mansoor, Chairman STZA Amir Hashmi, Chairman FBR Dr Muhammad Ashfaq Ahmed, Chairman CDA Amir Ali Ahmed, and other top officers were present at the meeting.
