PM approves incentive package for IT sector, freelancers
- Public-private partnership venture capital fund also given go-ahead
Pakistan Prime Minister Imran Khan approved on Tuesday a number of incentives, including tax exemptions, to facilitate the IT sector, freelancers and startups, a statement from the ministry said, as the country looks towards the digital economy to boost its dollar inflow.
The Ministry of Information Technology and Telecommunication (MoITT) added that the tax exemption benefit was the biggest demand of the sector.
"The other fiscal and non-fiscal incentives for the industry were proposed by the MoITT," it said.
Read Business Recorder's earlier report here: Freelancers: MoITT prepares incentive package
"Long-outstanding issue of IT companies regarding easy inflow/outflow of foreign currency has also been addressed as specialised foreign currency accounts (FCY) for IT/ITES companies and freelancers will be introduced to meet their operational needs."
The approval was made in a meeting chaired by Prime Minister Imran Khan on Tuesday. Officials of MoITT, Pakistan Software Export Board (PSEB), State Bank of Pakistan (SBP), Federal Board of Revenue (FBR), Special Technology Zone Authority and Ignite National Technology Fund were also present in the meeting.
Faulty submarine cable causes internet disruption in Pakistan
According to the MoITT statement, the PM has directed to allow IT/ITES Companies and freelancers to retain 100% amount of remittances received through proper banking channels, in FCY Accounts without any compulsion to convert them into PKR.
Furthermore, there will be no restriction of outward remittances from FCY account for PSEB-registered IT Companies and freelancers.
PM Imran bets on IT sector to generate employment, dollar inflow
The prime minister has also directed the SBP to introduce financing streams for IT/ITES sector and freelancers keeping in view operational architecture and industry needs for these sectors.
"Recommendations of the Pakistan Technology Startup Fund was also approved by the Prime Minister as part of this historic package for the creation of a public-private partnership venture capital fund. Ignite National Technology Fund will create this Fund through Public private partnership."
Earlier, Business Recorder reported that the MoITT has prepared a package of fiscal and non-fiscal incentives for freelancers including the proposal of reduced sales tax rate, not exceeding two percent, as well as income tax holiday on exports income/ revenue/ receipts till 2030 and fast-track and simplified opening of foreign currency bank accounts to create a favourable business environment.
As per the report, the MoITT wanted to re-align the government strategies to attract a reasonable chunk from global spending on outsourcing and freelancing services in Pakistan, which, according to the ministry, will help create thousands of new jobs for freelancers in different sectors in line with the current government policy of creating high-end and well-paying white-collar jobs for youth employed in the digital economy.