IT sector seeks policy continuity
Listen to article
Key stakeholders of the IT industry have urged the government to continue reforms and extend incentives for the significant growth of the IT sector and its allied fields to enhance export earnings and create jobs for youth, in line with the objectives of the futuristic "Uraan Pakistan" economic plan.
They called for incorporating their recommendations in the upcoming federal budget 2025-26 to enable the IT sector to grow faster, generate more employment opportunities, and contribute more effectively to strengthening the national economy.
They also stressed the need for continuity of existing policies and resolution of regulatory and tax-related challenges in the finance bill for 2025-26, particularly for the IT industry and freelancers, to help accelerate sectoral growth and development.
Khushnood Aftab, Convener of the IT Committee at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), recommended that the government reduce import duties on essential hardware components such as RAM, SSDs, motherboards, batteries, and displays. This would support the local assembly of fully built imported devices like laptops, desktops, and tablets, fostering local value addition and attracting investment in domestic production facilities.
He noted that increased support for the localisation of computer devices and hardware accessories could help Pakistan conserve foreign exchange, create skilled jobs, and position itself as a competitive exporter in regional markets.
The locally branded IT hardware sector, he added, deserves focused attention as it directly aligns with the "Made in Pakistan" initiative and the broader Digital Pakistan vision.
Furthermore, he emphasised the urgent need for the fair inclusion of local brands in government procurement, which would encourage scale, improve quality, and support domestic industry without compromising standards.
Pakistan must also prepare for the growing demand for AI-integrated hardware and edge computing devices, he said, which could be achieved through the introduction of targeted Research and Development (R&D) tax credits and innovation grants to support companies working on emerging technologies within the country, said Khushnood Aftab, who is also Chairman Viper Group.
Muhammad Umair Nizam, Senior Vice Chairman of the Pakistan Software Houses Association (P@SHA), said the IT sector is a key driver of economic growth, job creation, and foreign investment. He stressed that extending the Final Tax Regime (FTR) for the next decade would provide the policy stability necessary to encourage reinvestment and help Pakistan maintain its competitive edge in global markets.
He also urged the government to harmonise the definitions of IT and Information Technology Enabled Services (ITeS) across federal and provincial tax laws to ensure consistency, eliminate jurisdictional ambiguities, and reduce compliance burdens. A unified framework, he said, would enhance investor confidence, streamline taxation, and promote sectoral growth by creating a predictable regulatory environmentultimately strengthening Pakistan's digital economy and competitiveness.
Equally important, he said, is reducing income tax for salaried IT professionals, which would help retain top talent and mitigate the ongoing brain drain.
Pakistan Freelancers Association Chairman Ibrahim Amin cautioned against increasing tax rates on freelancers, who already pay taxes on every transaction in addition to fees charged by freelancing platforms and payment gateway service providers.
He recommended that the government exempt freelancers and IT companies from withholding tax (WHT) on international transactions under the Exporters' Special Foreign Currency Account (ESFCA) in the upcoming finance bill, following the concurrence of the Ministry of Finance and Revenue.
He also urged the finance division to ensure that all features of the Roshan Digital Account (RDA) be extended to ESFCAs for IT companies and freelancers, enabling them to benefit from streamlined banking services and improved access to capital.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Govt committed to turning Pakistan into a $1trn economy by 2035: minister
ISLAMABAD: Federal Minister for Planning, Development and Special Initiatives Ahsan Iqbal said that the government is committed to achieve the goal of transforming Pakistan into a $1 trillion economy by 2035. 'Pakistan's economic indicators are once again showing signs of recovery and the government's commitment to achieving the goal of transforming Pakistan into a $1 trillion economy by 2035. The policy and planning processes must now rely heavily on disaggregated and credible data. Data is fuel for audience-based decision making to address issues such as energy, export, food security, and employment. Data is the key to identifying underserved regions and guiding youth employment and skills development initiatives. This data-centric approach is critical to achieving the ambitious goal of transforming Pakistan into a $1 trillion economy by 2035. This shift as moving towards scientific and precision planning, ensuring ultimate transparency and accountability,' the minister expressed these views during his visit to the Pakistan Bureau of Statistics (PBS)'s office on Wednesday. State of the economy A comprehensive presentation on dynamic data was given to the minister during his visit. The presentation highlighted the immense potential of this data for effective and efficient planning, implementation, and monitoring of development and economic growth interventions under the Uraan Pakistan initiative. During his visit, the minister also toured the state-of-the-art URAAN Pakistan Data Centre, which stands as a cornerstone for modern governance. Copyright Business Recorder, 2025
Business Recorder
an hour ago
- Business Recorder
Indian stocks gain as US trade talks boost sentiment
Indian shares edged higher on Thursday, mirroring gains in broader Asia after a US–Vietnam trade deal and as investors awaited signs of progress on a potential pact between Washington and New Delhi. The Nifty 50 rose 0.4% to 25,555.20 points and the BSE Sensex added 0.41% to 83,752.36 as of 10:30 a.m. IST. Asian shares rose, with MSCI's Asia ex-Japan index up 0.25%, after US President Donald Trump announced a 20% tariff on Vietnamese exports under a new deal, boosting expectations of further trade breakthroughs. US and Indian trade negotiators were pushing on Wednesday to try to land a tariff-reducing deal, but some disagreements remained unresolved, Reuters reported citing sources. 'Sentiment has turned positive after Trump announced an agreement with Vietnam as it signalled an eagerness to strike further trade deals,' said Mandar Bhojane, research analyst at Choice Broking. However, analysts flagged the likelihood of bouts of profit booking in the near future. Twelve of the 13 major sectoral indexes gained. The auto index led with a 1.1% rise, while small- and mid-cap indexes and rose 0.5% each. Heavyweights HDFC Bank and ICICI Bank rose 0.7% and 1%, respectively. HDFC Bank's unit and the newly-listed HDB Financial jumped 4% on Thursday after a 13.6% jump in the debut session on Wednesday. State-run banks slipped 0.4%, with Punjab National Bank falling 2.5% after reporting slower loan growth in its June-quarter update. Among other stocks, D-mart operator Avenue Supermarts lost 3.7% after reporting a moderation in its sales growth in its quarterly business update. Nykaa slid 4.3%. The Banga family, one of the early investors in FSNE, planned to sell 2% stake via block deal at 5.5% discount to Wednesday's closing price, as per multiple news reports.
Business Recorder
4 hours ago
- Business Recorder
House Republicans advance toward vote on Trump's tax-cut bill
WASHINGTON: Republicans in the House of Representatives on Wednesday moved closer toward advancing U.S. President Donald Trump's massive tax-cut and spending bill, appearing to overcome concerns over its cost that had been raised by a handful of hardliners. As lawmakers shuttled in and out of closed-door meetings, a procedural vote held open for more than seven hours to give Trump and House Speaker Mike Johnson time to convince holdouts to back the president's signature bill. In the end it passed 220-212 along party lines, an indication but not a guarantee that Trump may have won over skeptics. One more preliminary vote was scheduled ahead of the main vote on the bill on the House floor, when minority Democrats, critical of cuts to social spending, were expected to make a final stand against the legislation. Leaving Speaker Johnson's office before the procedural vote closed, House Majority Whip Tom Emmer told Reuters progress was being made. 'There's going to be a vote tonight, and we'll finish voting on the rule, and then we'll do the debate. We'll vote on the bill,' Emmer said. Trump struck an optimistic tone in a social media post. 'It looks like the House is ready to vote tonight. We had GREAT conversations all day, and the Republican House Majority is UNITED, for the Good of our Country, delivering the Biggest Tax Cuts in History and MASSIVE Growth. Let's go Republicans, and everyone else - MAKE AMERICA GREAT AGAIN!' he wrote on Truth Social. The Senate passed the legislation, which nonpartisan analysts say will add $3.4 trillion to the nation's $36.2 trillion in debt over the next decade, by the narrowest possible margin on Tuesday after intense debate on the bill's hefty price tag and $900 million in cuts to the Medicaid healthcare program for low-income Americans. With a narrow 220-212 majority, Johnson can afford no more than three defections from his ranks. Earlier in the day, skeptics from the party's right flank said they had more than enough votes to block the bill. 'He knows I'm a 'no.' He knows that I don't believe there are the votes to pass this rule the way it is,' Republican Representative Andy Harris of Maryland, leader of the hardline Freedom Caucus, told reporters. Trump, who is pressing lawmakers to get him the bill to sign into law by the July 4 Independence Day holiday, met with some of the dissenters at the White House. Democrats are united in opposition to the bill, saying that its tax breaks disproportionately benefit the wealthy while cutting services that lower- and middle-income Americans rely on. The nonpartisan Congressional Budget Office estimated that almost 12 million people could lose health insurance as a result of the bill. Trump tax-cut plan returns to US House, Republicans divided on bill 'This bill is catastrophic. It is not policy, it is punishment,' Democratic Representative Jim McGovern said in debate on the House floor. Trump effect Republicans in Congress have struggled to stay united in recent years, but they also have not defied Trump since he returned to the White House in January. Representative Chip Roy of Texas was leading three holdouts who have raised concerns about increasing the deficit and high levels of spending. Asked why he expects the bill to pass, Republican Representative Derrick Van Orden told reporters: 'Because 77 million Americans voted for Donald Trump, not Chip Roy. That's why.' Any changes made by the House would require another Senate vote, which would make it all but impossible to meet the July 4 deadline. The legislation contains most of Trump's top domestic priorities, from tax cuts to immigration enforcement. The bill would extend Trump's 2017 tax cuts, cut health and food safety net programs, fund Trump's immigration crackdown, and zero out many green-energy incentives. It also includes a $5 trillion increase in the nation's debt ceiling, which lawmakers must address in the coming months or risk a devastating default. The Medicaid cuts have also raised concerns among some Republicans, prompting the Senate to set aside more money for rural hospitals.
