Home »IT and Computers » Pakistan » IT exports fail to achieve $5 billion target: P@SHA

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  • Jun 17th, 2017
  • Comments Off on IT exports fail to achieve $5 billion target: P@SHA
Pakistan information technology (IT) sector's reported exports remained $650 million against potential $5 billion for 2016-17 due to various reason especially visa issues, lack of quality human resource and stringent taxation by Federal Board of Revenue (FBR), said IT sector exporters.The exporters accused Sindh provincial government of lacking interest in the sector and imposition of taxes on exports of services which is not applicable in other provinces and negatively affecting the sector. Further disruption in business by FBR tax methodology is resulting in losing customers.

"The IT sector is projected to cross the textile sector exports by 2025. IT sector of Pakistan has a profit margin ranging from 5-30 percent," said Pakistan Software Houses Association (P@SHA) representative Saeed Ahmad briefing the sub-committee of the National Assembly standing committee on Information Technology and Telecommunication.Farhana Qamar chaired the sub-committee briefing, here on Friday to examine the performance of Pakistan Software Exports Board (PSEB).

Saeed Ahmed said that Pakistan information technology (IT) sector reported exports remained $650 million against India's $50 billion in 2016-17. He said that 70 percent market is US companies. However, IT firms do not get visas to US/Europe, easily. It is also difficult to sign large contract remotely online while most companies do not afford international sales costs."Pakistan IT exports should have reached $5 billion by now, however due to bad image of the country in media, big companies prefer India," Saeed said, adding that foreign companies are reluctant in coming to Pakistan, however if these companies show themselves as US or Dubai-based, then they work with Pakistani companies.

The P@SHA had been in talks with the Sindh government and Sindh Revenue Board on the matter of export services sales tax imposition for over a year, and a favourable policy announcement was expected through the Sindh Budget 2017-18. However, the Sindh Budget 2017-18 proposed to reduce export sales tax from existing 13% to new 3% but not abolishing it like other provinces did. This has raised concerns over Sindh government's commitment to create jobs in the province and increase exports. Further, no one is ready in the province to engage with the industry and even SRB communicated the industry to shift to other provinces if they were not happy in Sindh.

The NA committee observed gap between the industry and academia is one of the reasons behind the low exports growth. The committee directed Executive Director Higher Education Commission (HEC) to take industry input as well as update curriculum as per the industry and knowledge-based economy requirement.Chairman PSEB informed the committee that IT sector recorded 76 percent growth during last two years.



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