August 11, 2021 (MLN): In a recent development, Finance Minister Shaukat Tarin has approved a fund of Rs10 billion to extend cash rewards to IT companies on Tuesday to appreciate their significant contribution towards exports. In addition, the sector will also be awarded 5% rebate for exports.
IT, the booming sector of Pakistan is under the limelight since long, due to its growth trajectory. Considering the mounting interest of youth in this sector with their day-to-day achievements on national level led the policy makers to extend certain support to extract the most out of its potential.
In continuation, the government decided to offer the said rewards and rebate. In a meeting, Finance Minister said that given the existing potential, the export volume of this sector needed to expand and for this government is all set to provide the required assistance.
According to media reports, Pakistan Software House Association (PASHA) voiced about the attitude of Federal Board of Revenue (FBR) towards IT exporters which has created the bottlenecks in a way to boost exports. Moreover, the delegation from PASHA apprised the issues faced by industry, particularly software houses.
During the meeting, it was also decided that 1% of annual remittances by IT Sector will be earmarked to Pakistan Software Export Board (PSEB) for the skill development, branding, capacity enhancement, and establishment of software technology parks across Pakistan. The decision, if implemented in true sprit will make Pakistan a most attractive place for foreign investor.
Syed Amin-ul-Haque, Federal Minister IT and Telecom also appreciated the decision- a historic funding facilitation package proposed by Ministry of Information Technology and Telecommunication (MoITT) for the unprecedented growth of IT industry.
Making an announcement on its Twitter handle, MoITT quoted the Minister's message, “I express my gratitude to Mr. Shaukat Tarin, Finance Minister, for agreeing to form a high-level, high-powered dispute resolution committee for quick resolution of any tax-related disputes of IT/ITeS industry.”
With regards to PASHA’s concerns over FBR attitude regarding taxes, he informed that as per the directions of Finance minister, FBR would revise and expand the tax definition of IT/ITeS Industry in consultation with IT Industry to ensure coverage of all IT & ITeS sub-sectors.
He also thanked Finance Minister to undertake steps in order to facilitate foreign-owned companies operating in Pakistan with outbound remittances, & Razak Dawood, Advisor to Prime Minister, for supporting the proposals of the Ministry of IT & Telecom.
Directions given by Finance Minister will resolve profit repatriation issues for multinational technology companies. These steps will help attract FDI towards Pakistan’s technology sector, enable high-worth employment growth, and enhance export income for the country, he added.
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