FBR, SBP rules hinder IT export growth

Federal Minister for Information Technology and Telecommunication Syed Aminul Haque has said that the Federal Board of Revenue’s (FBR) policies and some rules of the State Bank of Pakistan (SBP) are hindering the growth of IT exports and increase in export remittances from freelancers.

Federal Minister for Information Technology and Telecommunication Syed Aminul Haque has said that the Federal Board of Revenue’s (FBR) policies and some rules of the State Bank of Pakistan (SBP) are hindering the growth of IT exports and increase in export remittances from freelancers.

It has sparked fears that the local talent may be working in Pakistan, but is operating its company from another country, which may be getting all the foreign exchange from IT exports, he said.

Presiding over a meeting of the Policy Committee and Research and Development Fund on Monday, the minister said that the Universal Service Fund (USF), a subsidiary of IT ministry, had done record work with the provision of broadband services in the last four years.

During 13 years from 2006 to 2019, the number of USF projects was limited to 59, after which directives were issued to ramp up the number of projects and improve performance. As a result, 65 broadband service and optic fibre cable projects were launched from 2019 to date, “which is a record”.

The minister pointed out that as a result of telecom policies and provision of broadband services to the un-served and under-served areas, the number of telecom subscribers reached a record level of 193 million by May 30, 2022.

Similarly, the number of 3G and 4G subscribers crossed 114 million, while the number of subscribers using broadband services reached 117 million.

Haque called FBR’s policies an impediment to the increase in IT exports, freelancers and export remittances. Owing to that, software companies and freelancers were considering shifting their businesses to other countries, he said.

“This will be dangerous because our talent will be used here but the benefits and credit will go to another country. In this situation, how can we get billions of dollars in foreign exchange earnings from the IT sector.”

The minister underlined the need for relaxing the strict conditions, including tax enforcement, and providing maximum relief to the IT industry and freelancers. “It is feared that if IT companies and freelancers are not given tax incentives, the industry will shut down soon.”

The meeting approved, in principle, a budget of Rs32.13 billion for the USF for financial year 2022-23 and Rs3.75 billion for the National Technology Fund (Ignite).

USF Chief Executive Officer Harris Mahmood Chaudhary and Ignite CEO Asim Shahryar apprised the meeting of the performance of their respective organisations and details of the amount allocated in the budget.

This news was originally published by The Express Tribune.