Tag: IT EXPORTS

  • Pakistan’s IT exports poised to surpass $3 billion this year

    Pakistan’s IT exports poised to surpass $3 billion this year

    Minister of State for Information Technology and Telecommunications, Shaza Fatima Khawaja, expressed optimism on Monday that Pakistan’s IT exports will exceed the $3 billion mark this year.

    Addressing the National Assembly, she outlined ambitious targets, projecting IT exports to reach $25 billion within the next five years, aligning with Prime Minister Shehbaz Sharif’s vision.

    Highlighting the strategic importance of the IT sector during Prime Minister Shehbaz’s international engagements, Khawaja noted significant developments. She announced a pivotal agreement with Huawei of China to transform Islamabad into a smart city, with plans to expand the Safe City project nationwide.

    Under this initiative, 300,000 youths are set to undergo specialised training starting next month, in collaboration with global tech giants such as Google and Microsoft, aiming to certify 1.5 million IT professionals over the next five years.

    Khawaja also underscored the expansion of the DigiSkills program and plans to establish a Centre for Excellence for Gaming, aimed at fostering the local gaming industry and creating a conducive startup environment.

    On the legislative front, she highlighted key initiatives including Pakistan’s first Cyber Emergency Policy, draft National Artificial Intelligence policy, and the Personal Data Protection Bill. Additionally, efforts are underway towards a National Semiconductor policy, underscoring Pakistan’s commitment to digital transformation.

    The Minister further elaborated on Pakistan’s National Digitisation plan, encompassing Digital Economy, Governance, and Society. Recently, a high-level delegation from Google met with Khawaja to discuss enhancing technology’s role in education, Artificial Intelligence (AI), and the digital economy.

    The delegation included Andrew Ure, Kyle Gardener, and Farhan Qureshi, reaffirming Google’s commitment to advancing Pakistan’s digital landscape.

  • Pakistan welcomes PayPal through strategic alliance

    Pakistan welcomes PayPal through strategic alliance

    In a groundbreaking move for Pakistan’s burgeoning freelance community, PayPal is set to establish its presence in the country through a strategic partnership with an existing international payment gateway.

    The joint venture announcement is anticipated for next week, marking a significant milestone for the approximately 1.5 million freelancers and IT professionals in Pakistan, making it the fourth-largest community globally.

    Caretaker Minister for IT and Telecom, Dr Umar Saif, confirmed that PayPal would operate indirectly in Pakistan through this collaboration. This development follows persistent efforts by previous governments to convince PayPal to operate within the country, which initially faced resistance citing security concerns.

    Dr Saif emphasised the positive impact of this move on IT exports and freelancer remittances, underscoring recent measures supporting a more liberal financial regime. He revealed that IT exports have already experienced a notable surge, with a 13 per cent increase in November alone, and expressed confidence that this growth trajectory will continue.

    The IT Ministry, under Dr Saif’s leadership, has implemented various initiatives to bolster the IT sector. These include providing smartphones through installment plans, standardising quality tests for IT graduates, and approving the National Space Policy. Dr Saif expressed optimism about launching 5G services in Pakistan by July 2024, with a spectrum auction offering 300 MHz.

    The government aims to boost IT exports from the current $2.6 billion to approximately $5 billion by facilitating a more liberal financial regime. As part of this effort, IT companies can now retain 50 per cent of their export revenue in dollars in a local account, simplifying international payments.

    In addition to these measures, the government plans to launch 10,000 e-Rozgar centres across the country, providing facilities for freelancers and start-ups. The recently approved National Space Policy allows companies to utilise low-orbit satellites for communication services, further enhancing the technological landscape in Pakistan.

    The upcoming joint venture between PayPal and an international payment gateway is expected to usher in a new era of financial opportunities for Pakistan’s freelancers and IT professionals, contributing significantly to the country’s economic growth and global standing in the IT sector.

  • Here’s when PayPal and Stripe payment services will be available in Pakistan

    Here’s when PayPal and Stripe payment services will be available in Pakistan

    Dr Umar Saif, Pakistan’s interim Federal Minister for IT and Telecommunications, shared noteworthy developments on Wednesday regarding the imminent availability of PayPal and Stripe payment gateways within the country. Addressing the flourishing freelancing community, he drew attention to the current scarcity of financial tools to facilitate payments within this sector. 

    During these discussions with major industry players, including PayPal, Stripe, and Wise, a compelling case for Pakistan was presented, despite reservations, including those arising from the Financial Action Task Force (FATF). 

    Dr Saif expressed optimism, foreseeing promising updates on PayPal and Stripe services in the coming four to six weeks, heralding positive implications for the freelancer community. 

    Highlighting the substantial size and potential of Pakistan’s IT freelancing workforce, the country ranks as the world’s second-largest online workforce, boasting approximately 1.5 million active IT freelancers. Nonetheless, the sector’s growth has been stymied by infrastructure limitations. 

    To address these challenges, the E-Rozgar programme is set to offer interest-free loans to the private sector, with plans for establishing co-working spaces capable of accommodating 500,000 individuals. Dr Saif also revealed a collaborative initiative with the Higher Education Commission (HEC) to introduce standardised testing for IT graduates. 

    The significance of Pakistan’s IT sector cannot be understated, with around 19,000 companies contributing substantially to both employment and the national economy, boasting official exports worth $2.5 billion. 

    Another pertinent issue discussed by Dr Saif is the reluctance of some IT companies to maintain foreign exchange reserves and revenues abroad due to constraints on repatriating US dollars. Despite conservative estimates placing Pakistan’s IT exports at $4–4.5 billion, the reality is obscured by restrictions on US-dollar spending. 

    Fueled by cooperative efforts between the IT ministry and P@SHA, a positive development has emerged. IT companies can now retain 50 per cent of their revenue in US dollar accounts and receive corporate debit cards from banks, facilitating international payments without hindrance. 

    In addition, the State Bank of Pakistan (SBP) has played a crucial role in assisting IT exporters. The SBP recently increased the permissible retention limit for IT exporters, allowing them to hold 50 per cent of their export proceeds in Exporters’ Specialised Foreign Currency Accounts (ESFCAs) with the aim of bolstering IT and IT-enabled services exports. 

  • Nokia’s CEO to visit Pakistan soon, key talks expected on 5G and 6G technology

    Nokia’s CEO to visit Pakistan soon, key talks expected on 5G and 6G technology

    Dr Umar Saif, the Caretaker Federal Minister for IT and Telecommunications, announced that the CEO of Nokia, the Scandinavian cellphone manufacturer, is planning to visit Pakistan. 

    https://twitter.com/umarsaif/status/1699116175018336620?s=20

    This announcement followed a meeting between Dr Umar Saif and Wille Eerola, the Consul General of Pakistan in Finland and Chairman of the Finland-Pakistan Business Council. During their meeting, they discussed mutual interests and increasing IT exports.

    Saif highlighted the significant opportunities for expanding Pakistan’s IT exports in Scandinavian countries. He also mentioned that Nokia is assembling 4G phones in Pakistan and that discussions about 5G and 6G technology would take place during the CEO’s upcoming visit to Pakistan.

    In addition, Wille Eerola extended congratulations to Dr Umar Saif for his appointment as the Caretaker Federal Minister for IT and Telecommunication.

  • Budget 2023-24: Finance Minister announces tax relief measures for IT sector and freelancers

    Budget 2023-24: Finance Minister announces tax relief measures for IT sector and freelancers

    In a recent announcement, the federal government has unveiled a series of measures aimed at fostering growth and investment in the freelancing and information technology (IT) sectors. The government has decided to implement a reduction in tax rates for investments in the IT sector, provide tax breaks to freelancers, and establish a favorable environment for investment by normalizing duty-free equipment provisions.

    During the budget presentation for the fiscal year 2023-24, Finance Minister Ishaq Dar highlighted the importance of the IT sector and its immense talent pool within the country. To support the growth of IT exports, the government plans to extend the current 0.25 per cent discounted income tax rate for the next three years.

    Recognizing the significance of banks in facilitating investment in the IT sector, the finance minister proposed a reduced tax rate of 20 per cent for banks involved in lending to this sector. This reduction aims to alleviate the burden on banks, as the existing tax rate for investments stands at 39 per cent.

    Additionally, the government has recommended providing Duty-Free Equipment privileges to incentivize investment in the IT sector. Moreover, the minister has suggested granting the industry the status of Small and Medium Enterprises (SMEs), enabling individuals to avail themselves of special and exclusive discounted income tax rates applicable to this sector.

    In a move to streamline processes for IT and IT-related services exporters, Minister Dar proposed the issuance of Automated Exemption Certificates to non-residents within 30 days. Furthermore, the government plans to reduce the Goods and Services Tax (GST) from 15 per cent to 5 per cent specifically for IT and ITeS services in the Islamabad Capital Territory (ICT).

    To support the freelancing community, Minister Dar recommended exempting individuals from the obligation of filing a sales tax return in order to benefit from the concessional rate of 0.25 per cent. Emphasizing the vital contribution of freelancers to the country’s foreign exchange earnings, the minister suggested that those whose IT and IT-enabled services exports were less than $24,000 in the previous fiscal year should be exempted from sales tax registration and allowed to file a simplified single-page income tax return.

    These measures underscore the government’s commitment to fostering a conducive business environment and encouraging investment in the freelancing and IT sectors, thereby facilitating economic growth and job creation.

  • Pakistan earned $1,523 million by providing IT services to various countries: report

    Pakistan earned $1,523 million by providing IT services to various countries: report

    Pakistan has earned US$1,523.280 million by providing different Information Technology (IT) services to various countries during the first seven months of the current fiscal year 2022-23, according to the Pakistan Bureau of Statistics (PBS).

    This represents a growth of 2.38 per cent as compared to US$1,487.865 million earned during the same months of the fiscal year 2021-22.

    During July-January (2022-23), the export of computer services climbed by 2.87 per cent as it increased from US$1,191.575 million last fiscal year to US$1,225.730 million this year.

    The exports of software consultancy services saw an increase of 5.57 per cent, from US$430.309 million to US$454.283 million while the exports of hardware consultancy services also rose by 158.07 per cent from US$1.357 million to US$3.502 million.

    According to APP, the export and import of computer software-related services surged by 11.89 per cent, from US$312.484 million to US$349.635 million whereas the exports of repair and maintenance services increased to US$1.594 million from US$0.770 million.

    The export of telecommunication services also witnessed an increase of 0.60 per cent as these went up from US$293.180 million to US$294.950 million during the months under review, the data revealed.

    Among the telecommunication services, the export of call centre services rose by 2.30 per cent during the period as its exports increased from US$118.669 million to US$121.398 million whereas the export of other telecommunication services decreased by 0.55 per cent, from US$174.511 million to US$173.552 million during the period under review, the PBS data revealed.

    Moreover, the exports of other computer services witnessed a decline of 6.70 per cent going down from US$446.655 million to US$416.716 million.

    Meanwhile, the export of information services during the period under review declined by 16.40 per cent going down from US$3.110 million to US$2.600 million.

  • Pakistan IT exports cross $1.5bn for the first time

    Pakistan IT exports cross $1.5bn for the first time

    The Pakistan Information Technology (IT) industry has experienced $1.5 billion in exports for the first time. In March, the industry received the highest export remittances of $213 million.

    According to data released by the State Bank of Pakistan (SBP, IT and IT-enabled services recorded a huge increase of $1.512 billion during the first nine months of the current fiscal year (FY) 2020-21.

    The industry observed an increase of $459 million, or 43 percent in comparison to the previous period in which the IT exports stood at $1.512 billion.

    The handsome growth in IT exports was driven through software consultancy, Business Process Outsourcing (BPO), e-commerce, telecommunication services, etc.

    Moreover, the Pakistani IT industry capitalized on the worst-hit market of India that is also a leading IT service exporter, but because of the COVID-19, the global industry has consulted experts in Pakistan.

    Pakistani software houses are getting a great influx of orders from countries like the US, UK, EU, and the East Easter or Gulf countries because they have a high demand for IT services.

    The country could further increase the exports from $2 billion to $3-3.5 billion in the next financial year if the stakeholders including software houses, the government, and concerned authorities develop an aggressive plan while minimising impediments in the IT sector.

    Furthermore, as per the old policies of the government, the IT sector was exempted from the tax network but the government has decided to reverse the decision.

    Companies are concerned about the immoral practices of government departments, and the recent raids on the IT companies from the intelligence agency also created a fearful working environment for the other software houses, which are considering setting up their offshore offices in different countries.

    On the other side, revenue experts said the IT industry with handsome balance sheets should contribute to support the ailing economy with taxes at a time when the industry is witnessing a peak time.