IT industry calls for policy continuity, tax relief to meet $25bn export goal

LAHORE: Stakeholders from the IT industry have called for the continuation of existing taxation policies to sustain domestic expansion and boost foreign exchange earnings, aiming to meet the ambitious export target of $25 billion by 2029 set in the federal budget.

They urged the government to provide clarity regarding tax exemptions for IT companies and withdraw unnecessary or newly imposed taxes. However, they welcomed the government’s allocation of funds for human resource development and skills training.

Senior Vice Chairman of P@SHA Muhammad Umair Nizam said the government should have extended the final tax regime (FTR) for IT companies and freelancers for the next 10 years, as previously requested, to attract foreign investment and accelerate export growth.

He also called for the abolition of the 5 per cent tax (10 per cent for non-filers) currently levied on debit card transactions linked to foreign currency accounts, saying that it significantly eats into IT companies’ earnings and profitability.

“The government should refrain from imposing taxes on e-commerce and online advertising, as such measures indirectly affect IT businesses and negatively impact their margins,” he added.

P@SHA also highlighted the urgent need to curb the ongoing brain drain by aligning local income tax policies with those applicable to remote workers. However, Nizam noted that no meaningful measures have yet been taken to support local companies and exporters.

Convener of the IT Committee at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Khushnood Aftab urged the government to allocate funding for the local production of IT devices and accessories as part of the broader digital transformation initiative.

He pointed out that a significant portion of the government’s IT budget is spent on importing laptops, computers and components -- exacerbating foreign exchange outflows. Aftab recommended reducing taxes on desktop components to promote local assembly and attract investment in the technology sector.

Noman Ahmed Said, technopreneur and CEO of SI Global Solutions, noted that while the budget made bold claims about supporting the digital economy -- with Rs29.9 billion earmarked for ICT development and Rs13.5 billion allocated for tech parks, cybersecurity and semiconductor training -- the policy framework remains weak.

He described the budget as “a digital push without a policy backbone”, warning that critical gaps in regulation may erode the gains from these investments.On a positive note, Said acknowledged the continuation of training programmes like e-Rozgaar, DigiSkills, and the National Freelance Training Program (NFTP), which have already helped freelancers earn over $1.6 billion. He also welcomed initiatives such as special technology zones (STZs) and the establishment of the Pakistan Crypto Council as signs of progress.

Still, he cautioned that Pakistan’s “infrastructure-first” approach is inadequate without supportive policies. “Globally, countries like India, Vietnam and Bangladesh are simplifying remote work and tech exports. Pakistan, meanwhile, is investing in digital highways that no one can afford to drive on,” he said.

“Our policymakers must align infrastructure with empowerment and vision with viable policy -- or risk losing our best talent,” he warned.The IT sector has maintained double-digit export growth and is expected to hit $4 billion by the end of the current financial year. Stakeholders believe consistent government support is essential to sustain this trajectory and positively impact key economic indicators, including the balance of payments.