Mian Zahid for urgent executive action to reform IT sector

KARACHI: Mian Zahid Hussain, President Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, has emphasised urgent executive action to reform the IT sector, noting that unresolved institutional issues limit over USD1.2 billion in yearly export revenue.

Hussain underscored the sector's vast potential, record exports, and key structural challenges.

Pakistan's IT and ITeS sector doubled to USD3.8 billion in FY 2024–25, making up about 1 percent of GDP.

He noted IT exports actually exceed $5 billion, with a USD1.2 billion gap due to policy failures. Our top-ranked freelance community and many IT firms avoid formal banks due to complex forex repatriation and tax compliance processes.

Mian Zahid Hussain urged three key actions to boost IT exports by at least 25 percent and maintain competitiveness. He emphasized replacing the temporary tax exemption expiring in June 2025 with a permanent 100 percent income tax credit, removing the harmful minimum tax on turnover.

He cited Ireland and Singapore as examples, warning that temporary incentives deter long-term FDI and IP growth.

The State Bank of Pakistan should create a 'Digital Exporters FX Simplification Window' requiring banks to accept digital transaction proofs like Pioneer statements for faster proceeds realization certificates issuance. This could quickly add USD1.2 billion to recorded exports.

The nation relies 99 percent on imported IT hardware, risking foreign reserves and security. Hussain urged SIFC to prioritize IT hardware manufacturing, offering permanent incentives like subsidized land and tax breaks to boost FDI and local value addition.

Mian Zahid Hussain highlighted a major skill gap, with 90 percent of 75,000 IT graduates yearly unprepared for export jobs.

He urged a national upskilling program focused on AI and Machine Learning, noting AI could add USD20 billion to the economy by 2030 and curricula need updating every 12-24 months.

Copyright Business Recorder, 2025