The senior vice chairman of the Pakistan Software Houses Association (P@SHA) has noted that information technology is becoming the fastest growing export industry of the country, with it set to achieve $4 billion in exports for FY2024-25, compared to $3.2 billion last year.
Addressing an interactive CXO session of the country’s top I.T. companies in Karachi, Muhammad Umair Nizam noted that the I.T. industry, as a whole, had expressed its satisfaction on I.T.-oriented initiatives of the Prime Minister’s Office (PMO); Ministry of Information Technology and Telecom (MoITT); Special Investment Facilitation Council (SIFC) and Pakistan Software Export Board (PSEB).
However, he said, they were demanding the Federal Board of Revenue (FBR) and the State Bank of Pakistan (SBP) expedite their policymaking; regulatory easing and implementation for an enabling, facilitative and incentivizing environment to match the rate of expansion in the I.T. and I.T.-enabled Services industry.
Nizam explained that the country is fast expanding in new sub-sectors and verticals in various tech spheres and conventional regulations create bottlenecks due to their inability to adapt. He urged the federal government to unveil a pro-investment and pro-business federal budget in 2025-26, noting P@SHA has already submitted its detailed and data-driven budgetary proposals to the concerned ministries and institutions.
According to the P@SHA official, the organization is anticipating a 10-year tax holiday to encourage new foreign and domestic investments; streamlining of foreign exchange regulations; facilitation from commercial banks; removal of sales tax anomalies; allocation of funds for skills development and acceleration of the operational materialization of Special Technology Zones and I.T. parks.
Nizam highlighted that one of the critical demands of I.T. companies is parity and economic sense in the income tax applied to their salaried employees and freelancers working in the country. Salaried employees have to pay up to 35% in taxes while freelancers pay only 0.25-1%. This glaring anomaly, he said, discourages salaried employees and needs to be fixed in the budget.
Former P@SHA chairman Muhammad Zohaib Khan said that the I.T. is the only industry in Pakistan with an industry trade surplus in the vicinity of 75%–and is the only industry that can grow at an exponential rate; develop skilled workforce and create employment rapidly; help curtail trade deficit and keep current and external accounts healthy on a sustainable basis.
The P@SHA session discussed and consulted on trends in Pakistan’s I.T. exports, its challenges, infrastructural growth, governmental relations, international collaborations and investments. CEOs and other senior executives of exporting companies participated in the strategic discussions.