Tax exemption on IT exports for another six years, declared by PM. The PM of Pakistan, Shahid Khaqan Abbasi has made a big decision of extending tax exemption on IT exports for next six years till 2025. The decision has been taken to improve the IT infrastructure and to promote digital startups and ventures across the country.
It will surely encourage IT exporters and helpful to promote technological advancement in Pakistan.
Pakistan’s Prime Minister made this announcement this Friday while inaugurating the National Incubation Center (NIC) at NED University, in Karachi.
Funded in association with Ignite by the Ministry of Information Technology and Telecommunication, incubation center cost Rs. 2.5 billion. It will pursue the same performance standards which Incubation centers in Lahore, Islamabad, and Peshawar do.
The PM announced,
“Cash reward for IT and IT-enabled services similar to the rebate for textile will be given to promote IT exports”
During the announcement, he declared major incentives for the IT industry, which consist of a 5% cash reward on exports, loan exemptions for IT companies, and 5% sales tax on IT products in federal areas as well as Islamabad.
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The PM hoped for the provincial governments to do the same, a constitutional amendment gives autonomy to the provinces for setting tax rates on such services. Do note that these exemptions, for now, will only be available to companies whose area of operation is in Islamabad and other federally administered areas.
“Loans will be given at low rates and will require less collateral; tech special economic zones will also be built to facilitate the sector,” PM of Pakistan said.
Furthermore, SBP also instructed banks to offer loan reliefs and better financing services to IT companies in Pakistan.
According to the PM, Pakistani companies got much less in funds from banks in comparison to neighboring countries like Bangladesh.
In addition, for the tech sector PM also announced Special Economic Zones (SEZ’s) which will be acknowledged by the BOI and MoITT.
It was much-needed decision to incentivizing this sector as IT export industry plays a main role in shaping the country’s economy. It covers approximately 12% of Pakistan’s comprehensive exports.
