PM announces Technology Startup Fund; orders building STZs in provincial capitals

February 22, 2022: Prime Minister Imran Khan Tuesday while announcing the establishment of Pakistan Technology Startup Fund, directed the authorities concerned to develop Special Technology Zones (STZs) on a fast-track basis in Islamabad as well as all provincial capitals to create hubs of technology innovations.

He, chairing a meeting to follow up on his foreign visits and IT sector initiatives introduced by the government, said the Technology Startup Fund would provide seed funding worth Rs 1 billion to around 50 startups annually.

Announcing a historic reform package for the growth of the IT sector, he said in the first phase, different sectors in Islamabad would be declared as Special Technology Zones so that IT firms and freelancers could avail of benefits offered by Special Technology Zones Authority (STZA).

The prime minister said the tech-savvy youth and information technology sector were Pakistan’s biggest assets that could be exploited to bridge the huge current account deficit.

“We are announcing tax holiday and 100% Forex retention for IT and Information Technology Enabled Services (ITES) companies as well as freelancers registered with Pakistan Software Export Bureau (PSEB) to incentivise the investment in the IT sector for an economic turnaround,” he commented.

Emphasising his vision to boost IT exports to $50 billion in the next few years, the prime minister highlighted the importance of unleashing the IT industry by bringing the ease of doing business and the best incentives globally available.

He also directed them to introduce necessary changes in the foreign exchange and income tax policies to help IT startups thrive in the country.

These reforms include the launch of Roshan Digital IT Accounts (RIDA) by the State Bank of Pakistan to allow freelancers and IT firms to retain 100% of their foreign income in foreign exchange with no restrictions on the movement of forex; resolution of double taxation of IT sector by FBR; and the exemption from Capital Gains Tax of venture funding into startups.

The prime minister directed to attract local and international venture capital funding into IT startups for creating jobs and bringing forex.

Earlier, the prime minister was informed that ICT export remittances in fiscal year 2020-2021 remained USD 2.1 billion as compared to USD 1 billion in 2018, and Pakistan was exporting to 120 plus countries in the world.

APP